The government said on Thursday that a controversial shale gas extraction method known as fracking should resume in Britain, despite the fact that it is suspected of having triggered earthquakes.

Exploratory fracking can restart under tight controls to “mitigate the risks of seismic activity”, Energy Secretary Edward Davey said in a statement.

The British energy firm Cuadrilla Resources had been forced to halt drilling trials on Lancashire’s Fylde coast in June last year. Its work was thought to have caused a 2.3-magnitude tremor in April 2011 and a 1.5-magnitude tremor in May.

But Davey said Thursday: “My decision is based on the evidence.

“It comes after detailed study of the latest scientific research available and advice from leading experts in the field.

“We are strengthening the stringent regime already in place with new controls around seismic risks,” he added.

“And as the industry develops we will remain vigilant to all emerging evidence to ensure fracking is safe and the local environment is protected.”

Davey said shale gas was a “promising new potential energy resource” for Britain which could contribute to energy security and reduce the reliance on imported gas.

Opponents say it causes water pollution but energy groups say it provides access to considerable new gas reserves and could drive down prices.

Chancellor of the Exchequer George Osborne announced the creation of a new Office for Unconventional Gas and Oil to simplify regulation of the sector and speed up production as part of his Autumn Statement on December 5.

Pre-historic man was already making cheese some 7,000 years ago, using perforated clay pots as strainers, scientists said Wednesday.

Cheese production would have been a key development in human history, allowing the preservation of milk in a non-perishable, transportable and more digestible form, said a report in the journal Nature.

Scientists have long speculated that pierced potsherds discovered at Neolithic-era sites around northern Europe may be from cheese strainers.

An international team said Wednesday they found proof for this theory from chemical analysis of fatty acid deposits on unglazed pottery pieces excavated in Poland, dating from about 7,000 years ago.

“The presence of abundant milk fat in these specialised vessels, comparable in form to modern cheese strainers, provides compelling evidence for the vessels having been used to separate fat-rich milk curds from the lactose-containing whey,” the researchers wrote.

Early farmers would have been lactose intolerant, lacking the genetic mutation we have since acquired to digest milk products long after being weaned off the breast.

Intolerance to lactose, a sugar found in calcium-rich milk, can cause bloating, stomach cramps and diarrhoea, and still afflicts a minority of people today.

Milk processing marked a key turning point in human history, giving access to a nutritious food source without having to slaughter precious livestock during the Neolithic period, which saw nomadic humans starting to settle down and farm.

The exact origins of cheese-making remain unknown.

The team, led by Richard Evershed of the University of Bristol’s organic geochemistry unit, said the study is the first to provide unequivocal evidence that cattle were being used for milk in northern Europe as long ago as the sixth millennium BC.

They also showed for the first time that people of the era were using different types of pottery for different purposes: as cheese strainers, cooking pots for meat, and bottles waterproofed with beeswax for storing water.

Cheese-making is a complicated process, involving the coagulation of milk using enzymes or acid to separate the semi-solid curd containing the protein and milk fats from the lactose-containing, liquid whey.

Today’s straining process has remained pretty much unchanged, though we now typically use a course textile or sieve instead of a perforated pot.

The scientific community is on edge. On Wednesday, a British team of scientists and engineers will use a special hot water drill to bore through to a lake buried under three kilometers of Antarctic ice. Sediments taken from the lake bed could revolutionize what we know about past climates and the fortitude of life forms.

Life on Earth can sometimes seem unvanquishable. It blossoms even in the deepest oceans and on the highest mountains. It thrives in boiling hot springs and inside cold rocks. At least when it comes to microbes, it seems like they find almost nowhere too extreme, too toxic or too dark to live in. Or is there?

Martin Siegert, 45, is currently searching for signs of life in a highly unusual place: at the very bottom of the world, in the endless darkness kilometers beneath Antarctic ice. He believes if he can find life forms here, it enormously increases the chances that there is also life elsewhere in the universe, perhaps on other planets.

Siegert, an ice researcher from the University of Bristol, in England, is currently camped out with 11 other members of his team and 100 metric tons of equipment on a glacier in Antarctica, in a spot where the sun won't set until late February. "It's minus 19 degrees Celsius (minus 2 degrees Fahrenheit) with very strong wind," the British scientist reported last week by satellite telephone, saying that although his equipment is creaking and groaning under the harsh conditions, "everyone in the team is very positive."

Now, the moment has come that Siegert has been working toward for 16 years. What he'll do has never been done before -- and the scientific community is on edge. "I'm just thrilled by this," says Klaus Grosfeld, 50, a geophysicist at the Alfred Wegener Institute for Polar and Marine Research (AWI) in the northern German city of Bremerhaven.

Starting Wednesday, the British Antarctic expedition will use a custom-built drill to bore into a freshwater lake buried 3.4 kilometers (2.1 miles) below the ice crust. Lake Ellsworth is one of around 380 known subglacial Antarctic lakes, bodies of water more isolated from the rest of the world than any other waters on Earth.

This lake last had contact with weather phenomena, the atmosphere and sunlight over 500,000 years ago, during a period when the climate was considerably warmer than it is today. The water temperature here can be as low as minus 2 degrees Celsius (28 degrees Fahrenheit), yet the majority of the water remains in liquid form. The pressure created by the weight of the glacier above is so extreme that it has shifted the water's freezing point.

Siegert's team will use a hot water drill, a device that looks something like a large showerhead, to bore through the ice with a jet of scalding water. Siegert has taken great care to make sure that the device will not introduce any microorganisms from the outside world into the subglacial lake. His equipment, made up of thousands of individual pieces, was painstakingly sterilized back in England, to a standard higher than that used in hospital operating rooms. Likewise, the water his drill will stream into the ice is completely free of germs after being run through filters and exposed to UV light.

Working in shifts, the researchers will need to drill continuously for around 100 hours in order to reach the surface of this deep subglacial lake. Once they reach it, there will be no time for missteps. The scientists need to take all of their samples -- both of the ice-cold water and the even more intriguing sediment layer at the bottom -- within 24 hours. After that, their window into this ancient lake will close up again, refreezing as if it had never been opened.

If all goes as planned, by early next week, Siegert will have 24 samples of 100 milliliters (3.4 ounces) each. Obtaining these 2.4 liters (0.6 gallons) of water and sludge comes with a high price tag -- about €10 million ($13 million) -- but is expected to be of great scientific value.

A Race to the Bottom

The Antarctic is currently the site of a race between Russian, British and American researchers to gain access to these enigmatic, ancient lakes beneath the ice.

Russian researchers were the first off the starting block earlier this year, but their project ended rather more ignominiously than they had hoped. In February, they attempted to bore into the fascinating Lake Vostok in the eastern part of the continent. This subglacial lake is one of the planet's largest freshwater reservoirs. It's located 4 kilometers (2.5 miles) beneath the ice and has been isolated from its surroundings for 14 million years. But before the researchers were able to take their samples, the onset of the Antarctic winter forced them to depart.

If the Russian team returns to continue the project, it can expect its work to meet with complaints from international colleagues. The Russians' drilling technique requires that their hole in the ice be kept open using antifreezing agents, such as kerosene and Freon, which are substances teeming with bacteria. As a result, other scientists will view the Russian team's findings with skepticism. "There are serious concerns that the lake will be contaminated," says Grosfeld, from the AWI.

American researchers, meanwhile, plan to explore the much smaller Lake Whillans, located closer to the South Pole and just 800 meters (2,600 feet) beneath the ice. Like the British team, the Americans will use sterilized equipment and a hot water drill. They won't arrive until January, though, by which point their British colleague Siegert will be finished with his own Antarctic expedition -- and may already know whether life truly exists here in this icy heart of darkness.

"I would be very surprised if we didn't find signs of microbes," Siegert says. Here on Earth, he explains, and perhaps in outer space as well, it can almost be taken as a law of nature that: "Where there's water, there's life."

Blogs, videos, illustrations and other information can be found on the Subglacial Lake Ellsworth Antarctica website.

The Hubble Space Telescope is giving scientists a look at the oldest galaxies ever seen, dating back some 13.3 billion years — providing a glimpse into how the cosmos must have looked right after the Big Bang.

NASA scientists announced Wednesday that Hubble has uncovered seven never-before-seen primitive galaxies dating back to when the universe was less than four percent of its current age.

These archeological images from Hubble were gleaned from an intensively studied patch of sky known as the Ultra Deep Field (UDF).

A team of astronomers led by Richard Ellis of the California Institute of Technology in Pasadena, California used Hubble’s Wide Field Camera 3 (WFC 3) to peer deeper into space than any previous Hubble observation.

Hubble scientists said the most ancient of the seven new galaxies came into being about 13.3 billion years ago — some 380 million years after the Big Bang.

With this newest discovery, scientists nudge even a little closer to the very origins of the universe.

“Looking at these galaxies allows us to learn many, many things about the universe after the Big Bang — about our origins,” said Abraham Loeb, chairman of the Astronomy Department at Harvard University.

“For instance, we discovered that the galaxies then were 1,000 times denser than the galaxies today,” he said.

“These pictures are like the first ultrasound of an infant. It’s the oldest archeology material on the universe,” said Loeb.

He expressed hope that Hubble may be able to plumb the depths of space for even older galaxies, perhaps nearly as old as the universe.

“To find the first galaxies we will have to look further, but there is less light, the galaxies are smaller,” Loeb told reporters.

The never-seen-before galaxies are key to interpreting the development of the first stars and the formation of the first galaxies that later evolved into the elliptical galaxies like our own Milky Way that now populate the universe, the space agency said.

One major goal of the program is to determine how rapidly the number of galaxies increases over time in the early universe. This measure is the key evidence for how quickly galaxies build up their constituent stars.

Hubble has transformed the field of astronomy since it was first launched in 1990.

Ellis said Hubble continues to make breakthroughs in space research, thanks to the sheer power and precision of the oft-rehabbed space telescope.

Hubble underwent repair during a shuttle mission in 2010 that left it with a new camera and spectrograph as well as fixed and spruced up scientific instruments.

“For the first time in 23 years we could use Hubble full tilt,” Ellis said.

“Our study has taken the subject forward in two ways,” Ellis explained during a telephone press conference.

“First, we have used Hubble to make longer exposures. The added depth is essential to reliably probe the early period of cosmic history,” he said.

“Second, we have used Hubble’s available color filters very effectively to more precisely measure galaxy distances,” Ellis added.

First launched in 1990, the telescope was repaired and upgraded in 1993, 1997, 1999, 2002, 2008 and 2010. The final upgrade extended the life of Hubble another five years, through 2015.

US Secretary of State Hillary Clinton will testify next week to Congress about the findings of an investigation into a deadly attack on a US mission in Libya, a senior US lawmaker said Wednesday.

Representative Ileana Ros-Lehtinen said Clinton would appear before the House Foreign Affairs Committee on December 20 to discuss the conclusions of the State Department probe into the Benghazi attack.

Ambassador Chris Stevens and three other American staff were killed in the September 11 assault by dozens of heavily armed militants on the US consulate, which has since been linked to elements with Al-Qaeda ties.

“The Foreign Affairs Committee will hear testimony from Secretary of State Hillary Clinton on the State Department’s findings of the Accountability Review Board and how to prevent attacks from happening again at other frontline posts,” Ros-Lehtinen, the committee chairwoman, said in a statement.

The much-anticipated hearing will start at 1:00pm (1800 GMT) and will be closely followed after Republicans accused the administration of failing to provide proper security, and seeking to cover up the Al-Qaeda links.

The review, headed by veteran diplomat Thomas Pickering, was set up in the days after the attack. It is not yet known whether the report will be publicly released before the hearing.

Clinton has said she takes responsibility for what happened in Benghazi and called the attack her “worst time” during her four years as secretary of state.

“We take risks in the work we do. The people who do this work, are often in very threatening environments, whether it’s our military or our civilian people around the world, I have just the most extraordinary admiration for them.”

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Clinton: No plans to run for president in 2016

By Agence France-PresseWednesday, December 12, 2012 18:36 EST

Outgoing Secretary of State Hillary Clinton said again Wednesday she has no plans to make a second bid to be America’s first woman president.

“I’ve said I really don’t believe that that’s something I will do again,” she told Barbara Walters from ABC News.

“I am so grateful I had the experience of doing it before,” she added, alluding to her 2008 White House bid, in which she was defeated for the Democratic Party nomination by then senator Barack Obama.

However, in good diplomatic fashion Clinton, who remains the most popular figure in the Obama cabinet, said “all doors are open” in the future.

“I’ve been, as you know, at the highest levels of American and now international activities for 20 years, and I just thought it was time to take a step off — maybe do some reading and writing and speaking and teaching.”

She confirmed to Walters, who had selected the nation’s top diplomat as one of her “10 Most Fascinating People of 2012,” that she plans to step down as soon as her successor is sworn in and there has been a smooth transition.

But having just turned 65, Clinton ruled out age as a factor in determining whether she would run in the 2016 presidential election.

“I am, thankfully, knock on wood, not only healthy, but have incredible stamina and energy,” she said.

“I just want to see what else is out there. I’ve been doing, you know, this, this incredibly important and satisfying work here in Washington, as I say, for 20 years. I want to get out and spend some time looking at what else I can do to contribute.”

Ironically, the interview was filmed before the normally indefatigable Clinton was felled by a stomach virus which she caught on her return from a trip to Europe and which has kept her out of the public eye since the weekend.

Clinton also joked with Walters about people’s fascination and obsession with her hair, admitting she doesn’t travel with a hairstylist, and so has let it grow longer.

“I’m not very competent myself. I’ve been admitting that for years, which should be obvious to everyone,” Clinton joked. “And so it became simpler to just grow it so that I can pull it back, and I can stick rollers in.”

Since taking up her post almost four years ago, Clinton has kept up a relentless pace, visiting some 112 countries and is on track to rack up a million miles on the job, making her the most traveled secretary of state ever.

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December 12, 2012

Census Officials, Citing Increasing Diversity, Say U.S. Will Be a ‘Plurality Nation’

By MICHAEL COOPERNYT

The term “minority,” at least as used to describe racial and ethnic groups in the United States, may need to be retired or rethought soon: by the end of this decade, according to Census Bureau projections released Wednesday, no single racial or ethnic group will constitute a majority of children under 18. And in about three decades, no single group will constitute a majority of the country as a whole.

As the United States grows more diverse, the Census Bureau reported, it is becoming a “plurality nation.”

“The next half century marks key points in continuing trends — the U.S. will become a plurality nation, where the non-Hispanic white population remains the largest single group, but no group is in the majority,” the bureau’s acting director, Thomas L. Mesenbourg, said in a statement.

The new projections — the first set based on the 2010 Census — paint a picture of a nation whose post-recession population is growing more slowly than anticipated, where the elderly are expected to make up a growing share of the populace, and that is rapidly becoming more racially and ethnically diverse. All of these trends promise to shape the nation’s politics, economics and culture in the decades to come.

The nation’s total population is not expected to hit 400 million until 2051, which is 12 years later than the bureau previously projected, said Jennifer Ortman, a demographer with the Census Bureau. The prediction that the nation’s population will grow more slowly reflects the bureau’s projections that there will be fewer births and fewer immigrants coming to the United States, based on recent trends.

Caring for an aging population, and paying for it, will continue to pose challenges. By 2060 one in five people in the United States will be 65 or older, the Census projects, up from one in seven now. The share of the population that is between 18 and 64 — considered working age — is expected to decline to 56.9 percent in 2060 from 62.7 percent now. In 2056, there are projected to be more people 65 and over than under 18 for the first time.

The diversity of the nation’s children is increasing even faster than was previously expected, said William H. Frey, a demographer at the Brookings Institution. “When the 2020 Census comes around, we’re going to have a majority-minority child population,” he said in an interview.

The Census Bureau expects that moment to come in 2018, several years earlier than it previously predicted. The bureau predicts that by 2043 — which is a year later than it previously projected — there will be no single majority group in the country as a whole, as the share of non-Hispanic whites falls below 50 percent.

The population of non-Hispanic whites is expected to shrink both as a share of the population and in raw numbers, the bureau predicted: it is projected to peak in 2024 at 199.6 million, and then to fall by nearly 20.6 million through 2060.

The Hispanic population is expected to more than double during that time, to 128.8 million in 2060 from 53.3 million now. In 2060 nearly one in three residents will be Hispanic, up from about one in six now. (People who identify themselves as Hispanic may be any race.) The black population is expected to increase to 61.8 million from 41.2 million over the same period, with its share of the population rising slightly. And the Asian population is expected to double, to 34.4 million in 2060 from 15.9 million now, with its share of the population climbing to 8.1 percent from 5.1 percent.

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Bernanke speaks at last – but manages to confuse Wall Street analysts

By Heidi Moore, The GuardianWednesday, December 12, 2012 20:03 EST

Federal Reserve chairman Ben Bernanke just had one of the most surprising press conferences of recent years, in which he indicated, in specific terms, the long-awaited end of the central bank’s intervention in the markets.

Bernanke told Fed watchers to look out for higher interest rates when unemployment, currently at 7.9%, hits 6.5%. He also said he was willing to see higher rates of inflation hit the economy.

At least, we think that’s what he said.

The experts are still translating Bernanke’s trademark obscure financial patois.

Scott Minerd is the chief investment officer of Guggenheim Partners, where he oversees around $160bn. Like many other investors, he regularly mines Bernanke’s statements for clues about what the Fed will do next – which is crucial when the Federal Reserve is such a big player in the markets. He found himself thrown off by the contradictions, broad hints and unexplained numbers in the Fed’s statement.

“I think Dr Bernanke is very good at understanding that you don’t need to answer a question,” Minerd said. “All you need to do is respond.”

And respond, Bernanke did – for an hour. At the end, CNBC host Rick Santelli quipped that no traders at the New York Stock Exchange had understood a word of what Bernanke said.

Investors – both big ones and regular people – should be keenly interested in when the Fed will stop its intervention in the markets. There is evidence that the Fed is distorting the real prices of bonds, which Bernanke gave a nod to today when he acknowledged “unintended consequences.” Long periods of low interest rates could also be hurting parts of the economy. People who have savings are earning no interest, and even banks are finding it harder to make money with such low rates.

The Fed is currently trying to boost the economy in two ways: it is keeping interest rates very low, at zero, in the belief that it will encourage banks to lend and also, as a side effect, boost the stock market. The Fed is also pouring billions of dollars a month into the economy by buying up mortgage bonds and Treasury bonds.

The Fed believes that by buying mortgage and Treasury bonds, it can control the supply and push other investors to buy corporate bonds or deploy their money in other useful ways in the economy. The Fed is currently holding over $2tn of bonds, or more than double the amount it held only five years ago.

In today’s statement, Bernanke seemed to be saying something remarkable: he suggested that the Fed would consider ending its policy of low interest rates once unemployment gets down to 6.5% and inflation rises.

That’s the most specific detail the Fed has ever given about its plans to raise interest rates, which have been at historic lows for several years.

But why so specific? Why 6.5%? The Fed chairman said, after all, that he considers around 5% unemployment as “full employment.” Six and a half percent is a far cry from that, and suggests that the Fed is getting impatient to raise interest rates again – but we can only surmise.

The new benchmark announced on Wednesday also contradicts when the Federal Reserve has said before. The central bank previously said it would start thinking about raising rates in 2015.

Now Fed watchers are confused about why the central bank changed its tune, and whether to look for the 6.5% unemployment number or the calendar date of 2015 for higher rates.

As a result, the specifics only had the quirky effect of leaving Fed experts dissatisfied.

Minerd disliked what he called the “ambiguity” in Bernanke’s statements. “What happens if unemployment drops to 6.5% in 2014?” Minerd said. “Does that mean he’s going to raise rates then?”

“If you can’t explain to me how you’re going to deal with it, you probably don’t have a strategy,” Minerd said of the Fed’s approach to exiting the markets.

Paul Edelstein, director of financial economics for IHS Global insight, noted the contradiction between the Fed’s desire for clarity and its actual words: “This approach to policy guidance was intended to increase understanding of the Fed’s intentions and to improve market expectations of future policy. The initial concern, however, is that it could do the opposite.”

Bernanke, who has devoted himself to bringing a new era of transparency to the Federal Reserve, is a far better communicator than previous Fed chairman Alan Greenspan, a weaver of riddles and creator of economic mazes who once quipped: “If you understood what I said, you obviously weren’t listening.”

But to say Bernanke is clearer than Greenspan is not to say much. Bernanke knows what he says has a strong effect on the stock market, usually, and so he speaks as obscurely as an 18th-century diplomat. Expecting him to be oblique, few observers press him to provide more detail.

There are less than three weeks before the government could careen off this “fiscal cliff,” but the chief GOP negotiator, House Speaker John Boehner, R-Ohio, said Wednesday that “serious differences” remain between him and President Obama after an exchange of offers and two conversations this week.

Boehner spoke after a closed-door meeting with fellow GOP lawmakers in which he advised them not to make plans for the week after Christmas.

Neither side has given much ground, and his exchange of proposals with Obama seemed to generate hard feelings more than progress. The Obama administration has slightly reduced its demands on taxes — from $1.6 trillion over a decade to $1.4 trillion — but isn’t yielding on demands that rates rise for wealthier earners.

Boehner responded with an offer very much like one he gave the White House more than a week ago that offered $800 billion in new revenue, half of Obama’s demand. Boehner is also pressing for an increase in the Medicare eligibility age and a stingier cost-of-living adjustment for Social Security recipients.

Boehner spokesman Michael Steel said the two men did not have any follow-up talks Wednesday.

Federal Reserve Chairman Ben Bernanke weighed in. He said: “Clearly, the fiscal cliff is having effects on the economy,” the uncertainty affecting consumer and business confidence and leading businesses to cut back on investment.

There is increasing concern about a Dec. 31 deadline to stop the expiration of Bush-era tax cuts and the start of across-the-board spending cuts that are the result of the federal lawmakers’ failure to complete a deficit-reduction deal last year.

Even if an agreement can be reached, the halting pace of negotiations is jeopardizing chances that it could be written into proper legislative form and passed through both House and Senate before the new Congress convenes Jan. 3.

Both sides accuse the other of slow-walking the talks. Democrats say Boehner is unwilling to crack on the key issue of raising tax rates on family income over $250,000 because he’s afraid of a revolt on his right flank and from younger, ambitious members of his leadership team.

Many conservatives say they would oppose a deficit-cutting package negotiated by Boehner that included higher tax rates.

“I’ll say no, because the focus has got to be on economic growth,” said Rep. Jim Jordan, R-Ohio. “The simple fact is raising taxes is not going to grow our economy.”

Others wouldn’t rule it out completely.

“If there’s real cuts in spending, if there’s real reform of entitlement programs, I think all of us would have to reconsider our position,” Rep. Raul Labrador, R-Idaho, said Wednesday. “But the problem is, I don’t see real cuts, real cuts. I’m not saying yes and I’m not saying no.”

Liberal Democrats are trying to pull Obama in the opposite direction on Medicare and Social Security. Eighteen months ago, Obama had all but agreed to an increase in the retirement age and a less generous inflation adjustment for calculating Social Security cost-of-living adjustments.

House Minority Leader Nancy Pelosi warned Republicans against insisting on raising the Medicare eligibility age as part of any deal.

“Don’t go there,” Pelosi said on “CBS This Morning.” She said raising the retirement age wouldn’t contribute much savings toward an agreement in the short term, adding, “Is it just a trophy that the Republicans want to take home?

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Obama Has Convinced Nearly Half of Republicans to Raise Taxes on the Wealthy

By: Jason EasleyDecember 12th, 2012PolitcusUSA

President Obama has so convincingly won the message war on taxes that according to new Bloomberg poll, nearly half of Republicans support raising taxes on the wealthy.

The Bloomberg poll found that Obama’s job approval rating (53%) is now at its highest level since December 2009. Two to one majorities support the president’s position on protecting Medicare and Social Security. This result pretty much obliterates the Republican talking point that the Romney/Ryan campaign gave Republicans some sort of victory on entitlements.

The biggest surprise in this poll was that despite two years of endless campaigning for not raising taxes on the wealthy, nearly half of Republicans support the president’s position that taxes need to be raised on the wealthy.

President Obama has been delivering the simple, clear, and consistent message that the top earners are paying too little in taxes. Mitt Romney tried to campaign on protecting the “job creators,” and was routed. John Boehner did more damage to his own party yesterday by again refusing to raise taxes on the rich.

Obama has so thoroughly won the message war on taxes that if this fiscal cliff dispute lingers for a few more weeks, he might even have a majority of Republicans on his side.

The Bloomberg poll raises the question exactly who are the congressional Republicans representing with their position on taxes? They aren’t representing the majority of the American people. They aren’t representing small business owners as they like to claim. It seems that the only people they are representing are conservative millionaires and billionaires and right wing tax zealots like Grover Norquist.

For decades, Democrats have treated taxes like a Republican issue that they should never discuss.

President Obama has done something really phenomenal. He has not only beaten Republicans on their own issue, but he has made taxes a Democratic issue.

When Obama gets his tax increase on the rich, it will be another in a string of political victories for a president that is dealing with the most dysfunctional congress ever.

President Obama is accomplishing something pretty incredible that if not appreciated in the present, will be admired in the future.

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It Exists: Details on proposed spending cuts by the President

By: Sarah JonesDecember 13th, 2012PolitcusUSA

Republicans and the media are still pretending that Obama has put forth no budget cuts, yet he has a very detailed plan on the White House blog for anyone to read, whereas Republicans have put forth a two page blank slate yet again.

Yet another surreal moment. As far as I am aware, there’s no automatic stop on the Internet that prohibits Republicans or the press from obtaining this information.

It exists.

Why then, is this happening over and over again? An example from December 11:

MR. CARNEY (White House spokesperson): Let me take your questions in relative order. First of all, I did hear what the Speaker of the House had to say, and I would note that if there is one fact that should not be in dispute it ought to be this: The President, unlike any other party to these negotiations, has put forward detailed spending cuts as well as detailed revenue proposals. It is a simple fact that the President put those forward to the not-so-super super committee in September of 2011, and that he again, in the process of these negotiations, put them forward as his position when it came to both the revenue that was required to achieve the kind of balanced deficit reduction package on the scale of $4 trillion that was necessary, as well as very specific spending cuts, including savings in entitlement programs.

And again, it’s not a mystery. We’ve seen this before. This is the document that contains the specific spending cuts. The Speaker of the House sent us a proposal that was two pages long that included one sentence on revenue. The proposal here includes, I believe, from pages 17 to 45, details on proposed spending cuts by the President — pages 17 to 45. I recommend them to you.

….

Q Jay, how do you explain this enormous disconnect that you say the President has put forward spending cuts, and yet today Speaker Boehner and Senator McConnell say no, you haven’t. There’s no leadership on that. They haven’t gotten any. Isn’t that something you need to address?

MR. CARNEY: I have. And I think I made –

Q — pages 17 through 45, is that –

MR. CARNEY: I’m making it clear that that assertion is incorrect. We all know it is because we have access to the computer. I don’t have any more hard copies for you, but I can give you the link.

….

Q Do you understand why the Republican leaders might say they didn’t receive any when you say they have?

MR. CARNEY: Mark, can we just end the charade here that we say they have?

Q Well, we didn’t go to the floor of the Senate and the House saying this. They did.

MR. CARNEY: No, no. But it’s not that we say one thing and it might be true, and they say one thing and it might be true. This is a real piece of — this is a real document here with pages and tables and numbers.

Now, I understand they may not agree with all of it, but it exists and it was put forward.

END

This continued with reporters asking for specifics on what might have changed in negotiations. A fair question — but we have 2 pages from Republicans, with a single sentence dedicated to revenue, reminiscient of their 2009 proposal that contained no actual budget numbers (another year they blew the font up to make up for lack of content, and then there was Paul Ryan’s Path to Prosperity with much pontificating and not a lot of actual numbers). Perhaps someone ought to ask them when they might get around to a wee bit of detail — especially since technically, it is their specific job to come up with budgets and they don’t appear to be doing much else.

The President’s plan offers $ 4 Trillion in deficit reduction over the next 10 years. The mysterious document that may or may not exist? It’s right here (hidden under “budget”). Also, in detail, tables.

It’s not as if Obama has a reputation for fiscal recklessness, like Republicans do. Under Obama, federal spending has grown at 1.4 percent per year, the slowest pace since Eisenhower, and far lower than the 8.7 percent in President Reagan’s first term. This includes the money spent on the stimulus to rescue us from the Bush economy. It was Republican Paul Ryan who refused to do the math on his budget, not President Obama.

Yet, the media buys the Republican line that they don’t have these budget cut proposals. Further, we are all to suspend disbelief and pretend as if Republicans have no access to the Internet, if in fact they never got their hard copy. This is how paid representatives of the people conduct themselves.

We all very busy pretending Republicans are suddenly serious people who actually care about the deficit and even though they only presented a 2 page document with one sentence relating to revenue, the real problem is that they can’t find Obama’s budget proposal because he is hiding it from them. And now we must pretend that Republicans shouldn’t be held responsible for reading things and admitting they exist.

The media needs to admit the Obama budget cut proposal exists and that Republicans have access to it, and stop pretending that there are two sides to reality.

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Warren assigned to Senate Banking Committee

By Eric W. DolanWednesday, December 12, 2012 20:24 EST RawStory

Sen.-elect Elizabeth Warren (D-MA), an ardent critic of Wall Street practices, will be assigned a seat on the Senate Banking Committee once the 113th Congress convenes in January.

Progressive and liberal groups had urged Democratic leaders to place Warren on the committee, which considers legislation regarding the nation’s financial institutions. Bank lobbyists, on the other hand, had pushed to keep her off the committee.

Warren was the chief architect of the Consumer Financial Protection Bureau, an agency dedicated to regulating mortgages, credit cards and other financial goods and services. During her Senate campaign, the Harvard Law School professor was heavily opposed by the financial industry, who favored Republican Sen. Scott Brown.

“I am excited to work with the members of our expanded majority. Our caucus is more diverse than ever, with a record sixteen female Democratic senators serving in the next Congress,” Senate Majority Leader Harry Reid said in a statement. “These committee assignments will allow all members of our caucus to bring their unique talents and expertise to bear as we work together to advance the interests of the middle class.”

Reports that Warren would be assigned to the Senate Banking Committee were published last week.

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December 12, 2012

Boehner Tries to Contain Defections on Fiscal Unity

By JONATHAN WEISMANNYT

WASHINGTON — Speaker John A. Boehner moved Wednesday to maintain Republican unity on deficit reduction talks as lawmakers on the far right openly chafed at his leadership and some pragmatists pressed for quick accommodation on tax rate increases on the rich.

Other lawmakers and aides to the speaker maintained that Republicans, both in the leadership and in the broader Republican conference, remain strongly unified behind Mr. Boehner as he tries to reach a deal with President Obama to stave off a potential fiscal crisis less than three weeks away.

Without a deal, hundreds of billions of dollars in automatic tax increases and spending cuts will kick in next month, possibly dragging the nation back into recession.

But the House’s most conservative members vowed to vote against any deal that raises taxes, openly challenging the speaker’s authority. Representative Jeff Landry of Louisiana, defeated in a House race decided last week, blamed the speaker for creating the perilous fiscal position the nation finds itself in. A senior Democrat suggested Mr. Boehner was dragging his feet on deficit talks to avoid striking a deal before January, when the House formally chooses its next speaker.

“The biggest impediment right now is the speaker’s ability to get a decent number of Republican votes for an agreement,” said Representative Chris Van Hollen of Maryland, who is the lead Democrat on the House Budget Committee.

“I’m getting increasingly concerned that one of the reasons the speaker is deciding to, I think, string out these discussions is that he wants to wait until Jan. 3, when the election for speaker takes place,” he said.

The Republican dissenters at this point represent a small portion of the House Republican Conference, but their public anger is striking. It also reflects a storm of criticism Mr. Boehner is facing on conservative talk radio and Internet outlets, in part for moving toward the president on taxes, in part for embracing a purge that removed four Republicans who consistently dissented from leadership positions of committees.

Representative Tim Huelskamp, Republican of Kansas, who was removed from the Agriculture Committee, said the vast majority of his district wants him to oppose Mr. Boehner’s re-election as speaker.

Representative Justin Amash, Republican of Michigan and another subject of the committee purge, said, “If Speaker Boehner wants to come back to my district, he’s not going to be met with very much welcome.”

In another twist, some of the House’s most uncompromising conservatives joined ranks with its most ardent liberals in embracing a ride into the fiscal unknown next month. Representative Steve King, Republican of Iowa, said the across-the-board spending cuts to military and domestic programs would “break the mold and get some real cuts for a change.”

Representative Cynthia M. Lummis, Republican of Wyoming, compared fears of a fiscal crisis to hysteria over the end of the Mayan calendar later this month.

“A bad deal is worse than no deal at all,” she said. “What is being made of this fiscal cliff is too much.”

Republican leadership aides dismissed such talk as the incessant grumbling of a group that has made dissent a sport. Michael Steel, a spokesman for Mr. Boehner, called Mr. Van Hollen’s assertion “nutty.”

With his bargaining position already tenuous, Mr. Boehner needs a unified party behind him if he is to hold out for a conservative deficit deal, leaders told the Republican conference on Wednesday. Concern on his right flank may be keeping him from moving toward a deal. The latest counterproposal from the speaker to the president on Tuesday did not move an inch off his position of $800 billion in revenue increases over 10 years, achieved through an overhaul of the tax code without tax rate increases.

In private talks with the president, Mr. Boehner assured him he would be willing to increase the total amount of tax increases in his offer higher than the $800 billion over 10 years he initially laid out. But he added that such a concession would come only if Mr. Obama significantly increased the amount he is willing to cut in spending, a leadership aide said Wednesday. The speaker said the president’s opening bid on spending cuts was not even large enough to justify the speaker’s $800 billion in revenue increases, the aide said.

A White House official said the president reiterated his request that Mr. Boehner detail what cuts he wants. He still has not.

Even before conservatives began speaking out of turn, pragmatists were pressing the leadership to take up and pass a Senate Democratic bill to extend expiring middle-class tax cuts, which would most likely ensure that tax rates would rise on the rich.

Senator Bob Corker, Republican of Tennessee, went to the Senate floor on Tuesday night to say his party should accept tax rate increases on the top 2 percent of households now, then battle Mr. Obama on spending early next year when Congress must raise the government’s statutory borrowing limit or risk a debilitating government debt default.

Republicans could also use as leverage the expiration in March of the “continuing resolution” — or C.R. — that is keeping the government operating.

“Where we may be headed is toward the end of this month rescuing the 98 percent, putting that issue over to the side and then using the debt ceiling or the C.R. as that forcing moment to cause us to finally come to terms with this fiscal issue,” Mr. Corker said.

The speaker expressed frustration with the president’s position, and suggested that lawmakers prepare for a spoiled holiday season. Representative John Shimkus of Illinois emerged from the weekly meeting of the House Republican Conference to say the speaker’s message was “keep your Christmas decorations up and make no plans.”

Democrats, eager to exploit cracks in the Republican ranks, dared the speaker on Wednesday to bring up the Senate-passed middle-class tax cut extension using expedited rules that would take a two-thirds vote to pass.

Jackie Calmes contributed reporting.

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The Koch Puppet Governors Continue to Dance for Their Masters as Rome Burns

By: RmuseDecember 12th, 2012PoticusUSA

An inanimate object or representational figure manipulated by an entertainer can be amusing and tell a story, and it is insignificant if the puppet-master is evil or kind, as long as the puppet is benign. However, a person manipulated by an outside entity, regardless their outward behavior, can be deceiving and dangerous. Over the past few days, Michigan’s governor and GOP legislature moved quickly to pass and sign a bill into law at the direction of their puppet masters the Koch brothers with assistance from the American Legislative Exchange Council (ALEC), and Americans for Prosperity.

The inaccurately named Right to Work (RTW) law signed yesterday by Koch puppet Rick Snyder was rushed through the GOP-controlled House because Republicans were concerned they may lack the votes once the newly elected legislature was seated in January. Snyder previously said the legislation was not a “policy priority” because it was “too divisive,” but his change of heart is calculated political payback against unions for supporting Democrats in the recent election, and a direct attack on public and private sector unions.

Last week, identical bills dealing with private and public sector unions sailed through the GOP Senate, and after the bills were signed into law, Snyder hailed them as “pro-worker and pro-Michigan.” During the floor debate House Speaker Jase Bolger said “this is about freedom, fairness and equality,” and that “these are basic American rights, rights that should unite us.” After the vote he said “Michigan’s future has never been brighter, because workers are free.” The workers are not exactly free, but they will be much cheaper for business as they earn lower wages, reduced health benefits, and smaller pensions that do little for workers and everything for big business.

A Michigan economist commenting on the RTW law, Charles Ballard, said, “If what we want to do is do a little bit better at attracting low-wage jobs, I think this may help, but it will not galvanize Michigan’s economy.” For the RTW law’s proponents, galvanizing Michigan’s economy was not the motivation; empowering the Koch brothers to do whatever they want to working people was, and RTW ensures middle class workers get lower wages, slashed benefits, disappearing pensions, and unsafe workplaces. It is precisely the prescription for the middle class the Koch brothers planned well in advance, and to help Michigan Republicans expedite the bill’s passage, the American Legislative Exchange Council (ALEC) provided the template.

The ALEC-aligned legislators beholden to their corporate masters simply copied ALEC’s model Right to Work template into the Michigan legislation, and it is nearly verbatim from the ALEC template. The ALEC model is part of the agenda Charles and David Koch have attempted to popularize and move from the fringes into binding law. The Koch’s private political operatives, Americans for Prosperity, backed the legislation in Michigan that is integral to Koch’s libertarian agenda of destroying union representation and eliminating their support for Democrats.

The Kochs may be celebrating their puppet’s success in Michigan for restricting union workers’ elected bargaining agent from negotiating pay, benefits and working conditions, but after being protected by union representation, workers will not stand idly by and be subjected to right to work conditions. Maybe earning minimum wage, living off food stamps, and depending on Medicaid for basic survival is bliss for Southern Red state workers, but Michigan union labor will not comport being treated as little more than slaves. However, they have a long battle ahead of them.

The ALEC legislation was contrived to make one of America’s workers’ rights strongholds into a RTW state at the behest of some of the biggest corporations in the world. It is an ongoing subversive effort to seize control of the government and destroy democracy by corporatists intent on transforming America into a land of peasants serving wealthy industrialists. As is usually the case, corporate backers of the ALEC law fraudulently claimed RTW laws significantly improve job growth and workers’ wages, but the evidence shows the exact opposite is true. According to the Economic Policy Institute, RTW does not boost economic growth, has no significant impact on attracting employers, lowers wages, and threatens employment benefits. Lower wages threaten job growth by reducing worker’s discretionary income, and when workers have less, they spend less, which in turn hurts the economy. Of the 22 states (mostly in the South) that labor under RTW conditions, not one has increased employment or boosted the economy as evidenced by red states with chronically lower wages, increased entitlement dependency, and predictable Republican majorities intent on weakening unions.

As union representation falls, so goes the middle class, and the past four years have seen a torrid attack on the middle class by Republicans in Congress and state legislatures. Remember, Republicans are against living wages, good benefits, voting participation, Social Security and unions that make the middle class strong by giving workers a voice in the labor market and democracy. Nine of the ten states with the lowest percentage of union workers are RTW states, and they have the weakest middle class (60% of the population) that is below the national average. Republicans are driving to make that pattern universal across the nation.

The ALEC-Koch attack on unions goes beyond punishing workers with low wages, although that is a value-added benefit for corporate America. Unions carry political clout that helps translate workers’ interests to elected officials, and ensure government serves the middle class’s economic needs, not corporations. Unions were instrumental in securing policies that support the middle class such as Social Security, the Affordable Care Act, workplace safety, lunch breaks, 40-hour work week, family leave, and minimum-wage laws, and it is exactly why conservatives support RTW laws; to destroy social programs and economic policy benefiting all Americans. There are myriad benefits to corporate America to weaken unions, but none as critical as eliminating their influence as a political force; damaging workers and the middle class is an extra benefit to entertain the Koch brothers.

Rick Snyder, ALEC, Americans for Prosperity, and the Republican Party are co-conspirators serving the Koch brothers’ quest for dominion over this country, realization of their vision of free market capitalism, and a libertarian paradise. At the last secret Koch Industries confab, the Kochs prepped for the “mother of all wars” that was the 2012 general election, and although they suffered a crushing defeat, their operatives (ALEC) had already laid the groundwork for a continuous assault on unions and democracy. The ALEC RTW legislation Michigan’s law was modeled after was from ALEC’s 1995 Sourcebook of American State Legislation, and it is a carefully planned, long term campaign to subvert democracy which is the sole intention of RTW, ALEC, AFP, and their puppet masters Charles and David Koch.

A recent fundraising email from Senate Minority Leader Mitch McConnell’s campaign suggested that President Barack Obama ordered the firm Public Policy Polling (PPP) to “manufacture” a survey that said the Kentucky Republican was the “most unpopular Senator in the country.”

A poll released by the left-leaning firm on Tuesday indicated that only 37 percent of Kentucky voters approved of McConnell.

“Both in terms of raw disapproval (55%) and net approval (-18) McConnell has the worst numbers of any of his peers, taking that mantle from Nebraska’s Ben Nelson,” PPP wrote.

But in an email published by the Louisville Eccentric Observer on Thursday, McConnell campaign manager Jesse Benton implied that Obama and other Democrats had conspired with PPP to fix the poll.

“Barack Obama and his allies told us what they were going to do,” Benton wrote. “They think if they can manufacture a difficult re-election for Senator McConnell back home in Kentucky then they can push our Leader around in Washington.”

He continued: “The partisan PPP polling company, which has been used as a tool for Obama Democrats to manufacture circumstances that don’t exist all across the country, descended upon Kentucky to proclaim that Senator McConnell has a 37% approval rating. The poll is laughable. But, the liberal press is gobbling it right up.”

“What was really surprising was that even cooked books couldn’t produce a Democrat candidate who could beat Senator McConnell head to head,” Benton said. “Cooked polls are certainly only the start of the liberals’ plans. They will throw the kitchen sink at us. This poll is just the tip of iceberg , and Leader McConnell needs your help. Please help with a contribution of $50, $100, $250 or even $500 today.”

PPP Director Tom Jensen told the Louisville Eccentric Observer that letter from McConnell’s campaign were similar to comments made by Republicans who were in denial about former presidential nominee Mitt Romney’s 2012 campaign.

“I think one of the biggest lessons of the 2012 campaign was that when Republicans are attacking polls it’s a sure sign that they’re losing,” Jensen explained. “GOP campaigns all over the country made these kinds of claims about us this year and we ended up calling every state in the Presidential race and Senate race we polled correctly. Nate Silver found that to the extent there was any bias in our polling, it was actually pro-Republican.”

A study from Fordham University political scientist Costas Panagopoulos found that PPP was one of the top three most accurate polling firms during the 2012 presidential election.

Hundreds of thousands of North Koreans held a mass rally on Friday to celebrate the nuclear-armed state’s rocket launch, as its youthful leader vowed new launches in defiance of US-led outrage.

Days before his first anniversary in charge of the isolated country, Kim Jong-Un upheld North Korea’s “unshakable stand” that the rocket programme will continue despite UN condemnation and calls for new sanctions.

The huge rally in Pyongyang, shown on state television, came two days after the launch of the three-stage rocket and just ahead of the anniversary Monday of his father Kim Jong-Il’s death.

The huge crowd standing in organised ranks in Kim Il-Sung Square — named after Kim Jong-Un’s grandfather — cheered as top officials hailed the success of the launch and praised the “bravery and wisdom” of the dynasty’s scion.

Refuelling its criticism of Wednesday’s launch, the US State Department said Kim had the chance as new leader “to take his country back into the 21st century” but instead was making the “wrong choices”.

Unbowed, Kim stressed the need “to launch satellites in the future… to develop the country’s science, technology and economy”, according to the North’s official Korean Central News Agency (KCNA).

It gave new details of the launch of the rocket to propel a satellite into space, which the United States, China and others on the UN Security Council said violated a ban on long-range ballistic missile tests by North Korea.

Kim had issued the final written order for the launch on Wednesday morning and “keenly observed” the whole process, KCNA said.

By placing a satellite in orbit, North Korea “showed at home and abroad the unshakable stand… to exercise the country’s legitimate right to use space for peaceful purposes”, Kim said according to the agency.

The UN Security Council held emergency talks on Wednesday after the North, already under international sanctions for nuclear tests in 2006 and 2009, ignored pleas from friends and foes and went ahead with the launch.

The council warned of possible measures over what the United States called a “highly provocative” act as countries including South Korea and Japan pressed for stronger sanctions against Pyongyang.

China — North Korea’s leading patron — backed the UN statement but its foreign ministry also pushed back against the pressure for stronger action, arguing that any response by the international community should be “prudent”.

Analysts say the symbolism of the launch was a prime motivating factor for North Korea as Kim, who is not yet 30, shores up his leadership credentials.

“The launch means the fulfilment of Kim Jong-Il’s last wish,” said Yoo Ho-Yeol, a political science professor at Korea University in Seoul.

“As such, it helps cement Jong-Un’s grip on power and strengthens his authority over the North’s military elites, securing their loyalty and a sense of solidarity under his leadership,” Yoo said.

The rocket launch has been seen as a timely boost for Kim, laying to rest the humiliation of a much-hyped but failed launch of North Korea’s Unha-3 rocket in April, when the carrier exploded shortly after take-off.

Outrage over the recent launch was mixed with concern that North Korea may follow past practice in following up a missile or rocket launch with a nuclear test.

The North’s first nuclear test in 2006 came three months after it tested a long-range missile. On that occasion, Pyongyang announced the test six days before it exploded the device.

The second test, in May 2009, came a month after a rocket launch that North Korea claimed had put a satellite in space.

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December 13, 2012

Despite Risks, China Stays at North Korea’s Side to Keep the U.S. at Bay

By JANE PERLEZIHT

BEIJING — Even though North Korea ignored China’s appeal not to test its new longer-range missile, the new leadership here appears intent on remaining a steadfast supporter of its wayward neighbor because it considers the North a necessary buffer against the United States and its allies.

Analysts said that China’s overriding fear was of a collapse of the hard-line Communist government in Pyongyang, which could lead to the reunification of the Korean Peninsula under a government in Seoul allied with the United States. China, they said, would consider an American presence on its doorstep untenable.

But China’s unyielding support of Kim Jong-un has a serious downside, they added, because it may lead to a result nearly as unpalatable: efforts by the United States and its regional allies Japan and South Korea to contain China.

“It stirs up regional security,” said Zhu Feng, a professor of international relations at Peking University who favors reducing support for North Korea. Without naming the United States, he added that the missile launching “facilitates China-bashers to work on hard-line policies to contain China, or just balance China.”

Obama administration officials were clearly exasperated this week with China’s inability to rein in Mr. Kim, saying that they were considering a stronger military presence in the Asia-Pacific region.

Beneath the official tolerance of North Korea, a debate about the wisdom of remaining loyal to such a world outlier and its defiant young leader simmers among analysts who strive to influence China’s foreign policy.

China runs the risk, Dr. Zhu said, of being bunched together with North Korea as one of “the two bad guys.”

“I feel very frustrated,” Dr. Zhu added. “At least we should distance ourselves from North Korea. The reality is, as long as North Korea can’t change their behavior, then peace and stability on the peninsula will be increasingly vulnerable.”

China has twice asked Mr. Kim, who inherited the leadership of North Korea after the death of his father at the end of last year, not to proceed with missile tests, and twice he has rebuffed the entreaties. Shortly after he came to power, a Chinese vice minister of foreign affairs, Fu Ying, visited Pyongyang to warn him not to conduct a test. In April, Mr. Kim went ahead anyway with a rocket launching, which fizzled. Last month, Li Jianguo, a member of the Politburo, visited North Korea to again urge restraint.

Despite their displeasure, China’s leaders see little choice but to put up with such indignities.

The slight pique expressed by the Foreign Ministry on Wednesday was not a signal that China would alter its course, the analysts said, or back tougher sanctions at the United Nations.

The official reaction was “very hesitant,” said Jin Canrong, a professor of international relations at Renmin University in Beijing.

After the missile test, Washington immediately started pushing for deeper sanctions at the United Nations and for a tightening of existing sanctions that China agreed to after earlier rocket launchings.

“China will not support a resolution; it will favor a president’s statement,” said Cai Jian, the deputy director of the Center for Korean Studies at Fudan University in Shanghai. A president’s statement at the United Nations is considered a much weaker form of condemnation than sanctions.

A major reason for not backing new sanctions is the fear that they would provoke North Korea to test another nuclear weapon, a far worse prospect than the launching of an unarmed rocket like the one on Wednesday, said Jonathan D. Pollack, a North Korea expert at the Brookings Institution in Washington.

“The North Koreans demurred from a third nuclear test in April, very likely under major Chinese pressure,” Dr. Pollack said.

In 2006 and 2009, North Korea tested a nuclear weapon soon after launching missiles. Dr. Pollack said a repeat of that action would pose a major test to the Obama administration, as well as to the new Chinese leader, Xi Jinping.

“Pyongyang may have decided now is the time to put down a major marker as Obama’s second term approaches and as South Korea elects a new president,” he said.

Beyond the hard strategic questions for the new Chinese leadership, the concerns among ordinary Chinese about why China bankrolls such a ruthless government should be considered, several Chinese analysts said.

“Internally in China, many voices are questioning all this spending on rocket launches instead of on improving people’s livelihoods,” said Jia Qingguo, an expert at Peking University.

The South Korean government recently estimated that North Korea had spent $2.8 billion to $3.2 billion since 1998 on its missile program, said Stephan M. Haggard, a professor of Korea-Pacific studies at the University of California, San Diego. That amount of money would have bought enough corn to feed the country for about three years, Dr. Haggard said.

The debate within China about its relationship with North Korea stems from the unusual nature of the alliance. Fundamentally, the two governments do not like each other and harbor deep mutual suspicions, said Stephanie T. Kleine-Ahlbrandt, the China and Northeast Asia project director of the International Crisis Group in Beijing. When North Korean officials visited Singapore this year to get new ideas for Mr. Kim’s government, leaders in Beijing — who have sent teams of their own to Singapore to study its softer form of one-party leadership — became very nervous, she said.

The larger fear is that any fundamental change in North Korea could send waves of refugees into China, who would be considerably more difficult to absorb than people of other nationalities on China’s borders.

“For the Chinese,” Ms. Kleine-Ahlbrandt said, “there are fewer problems keeping North Korea the way it is than having a collapse.”

BAMAKO, Mali — Oumar Ould Hamaha, a notorious Islamist commander in the deserts of western Africa, has nothing but disdain for the international powers he opposes or the hapless Westerners he and other militants subject to extreme deprivation, hunger, thirst and proselytizing for months on end.

But he openly appreciates them for helping Islamists acquire the one thing they cannot do without.

“Lots of Western countries are paying enormous sums to the jihadists,” he said in a telephone interview from northern Mali, crowing about the hefty ransoms militants have collected in the region. “The source of our financing is the Western countries. They are paying for jihad.”

Kidnapping is such a lucrative industry for extremists in western Africa, netting them tens of millions of dollars in recent years, that it has reinforced their control over northern Mali and greatly complicated plans for an African-led military campaign to take back Islamist-held territory.

Beyond the immediate risk to the 10 Europeans and 3 Algerians still being held — “At the first strike, the hostages will have their throats cut like chickens, one after the other,” Mr. Hamaha threatened — an intervention could face formidable opponents. Al Qaeda in the Islamic Maghreb, one of the factions that have seized northern Mali, is estimated to have amassed as much as $90 million or more in ransoms over the past decade, turning it into one of the region’s wealthiest, best-armed militant groups.

But Mali and its neighbors are still scrambling to cobble together soldiers, money and a workable plan to recapture lost ground. In fact, Mali, which is supposed to lead the international offensive against the Islamists, does not even have a stable government. On Tuesday, the nation’s prime minister resigned after being arrested by soldiers the night before, part of the continuing political disarray that allowed the Islamists to take the north in the first place.

As the United Nations debates plans for a military intervention in northern Mali, Islamists in the region appear to be on the hunt for more hostages. Three weeks ago, a French tourist was abducted in Mali and five humanitarian workers were seized in Niger in October, after a lull in kidnappings that lasted for months.

The abductions often follow the same frightening script: a sudden burst of movement, usually in the dark; guttural orders and shoves at gunpoint; then days of harsh driving deep into the desert.

The days stretch into weeks, months and even years in a sea of sand, waiting for deliverance or death. A gaunt acacia thorn-tree might be the only shade, the desert ground the only bed, and water — when it is given — often comes from a gasoline jerrycan.

“I lived through an experience that is absolutely unimaginable,” said Françoise Larribe, a Frenchwoman kidnapped in 2010 in northern Niger, where her husband was working at a uranium mine operated by the French company Areva. Her husband, Daniel, is still a captive; she was released unexpectedly after five and a half months that were “extremely tough.”

“The separation from my husband was rapid and painful,” she added.

Mr. Hamaha was with Al Qaeda in the Islamic Maghreb when he helped kidnap a Canadian diplomat, Robert Fowler, late one December afternoon in 2008 outside the capital of Niger, Niamey. Now the jihadist says he is “in charge of security” for the Malian offshoot of Al Qaeda in the Islamic Maghreb, Mujao, the Movement for Oneness and Jihad in West Africa, another of the three radical groups that control northern Mali.

The brigade commanded by Mr. Hamaha zoomed ahead of the diplomat’s car in “a slick, violent, well-coordinated and impeccably executed grab,” Mr. Fowler wrote in a new memoir, “A Season in Hell: My 130 Days in the Sahara with Al Qaeda.” He and an aide were on their way to dinner in the capital.

He lived through weeks of fear, sleeping on the sand, exposed to the brutal Sahara sun, to snakes and scorpions, fed meager bowls of rice, bounced from barren desert outpost to outpost.

“I spent nearly five months terrified,” Mr. Fowler said in a recent interview. “I was terrified that it would end in a tent with a knife at my throat, and my family would see it on YouTube.”

Mr. Hamaha, his captor, who takes calls from reporters, said: “Ah yes, the Canadian that we kidnapped. I don’t regret it at all. He was in a state of being lost,” referring to what he considered the Westerner’s perilous spiritual condition. The Canadian, Mr. Hamaha said, “learned many things from us.”

During his captivity Mr. Fowler, who was the United Nations special envoy to Niger, gained perhaps the sharpest insight yet into the mentality of some of the men who now hold northern Mali. “There’s no doubt of their faith: they would sit chanting in the full Sahara sun for hour after hour.”

The man who helped negotiate Mr. Fowler’s release during months of tortuous negotiations, Moustapha Chafi, an adviser to several governments in the region, described the Islamists’ mind-set as “total fanaticism.”

Still, Mr. Fowler added: “They are realists in the sense that they understand realpolitik. They understand pressure on governments.”

Some hostages have been killed by Al Qaeda in the Islamic Maghreb — including a British tourist, Edwin Dyer, in 2009, and a French humanitarian worker, Michel Germaneau, in 2010 — and the kidnappers have penetrated the heart of the region’s capitals, seizing two young Frenchmen in a Niamey restaurant in early 2011. The two, in town for a wedding, were killed hours later during a failed rescue attempt.

Only a few countries, including Britain, the United States and Algeria, have publicly stated their refusal to pay ransoms to terrorists. Other European nations have a much more ambiguous attitude, evidently paying to free their citizens without admitting to it. In France, “the authorities have never officially or publicly proscribed the paying of ransoms,” stated a French parliamentary report from last March.

The report recommended that “thought be given” to a change in policy so that ransom payments stop. “Giving in to terrorists amounts to financing them, and thus supporting what they do,” it said. The report cited an Algerian estimate that Al Qaeda in the Islamic Maghreb had received up to $150 million in ransoms over the last decade, a number it said was probably too high. A separate analysis by Stratfor, a private firm, put the amount at nearly $90 million.

The price of freeing Western hostages appears to be growing. “In 2010, the average ransom payment per hostage to A.Q.I.M. was $4.5 million; in 2011, that figure was $5.4 million,” David S. Cohen, the Treasury Department’s undersecretary for terrorism and financial intelligence, said in an October speech. He added that Al Qaeda in the Islamic Maghreb had probably profited more from kidnapping than any other Qaeda affiliate.

Four of the five humanitarian workers kidnapped in October were later released — one had died of his wounds — because the Islamists had evidently been looking for a European and seized the aid workers, who were from Niger and Chad, by mistake.

Last month, there was no such error. “The bandits pointed their weapons; they took the white man away,” said Checkné Cissé, an official in Diéma, in western Mali, recounting the Nov. 20 kidnapping of a Frenchman, Gilberto Rodriguez Leal, by seven masked and turbaned gunmen.

A 61-year-old retiree, Mr. Leal was touring the area in a specially outfitted camper; he had stopped in the village and was chatting with some youths when Islamists appeared out of the darkness, Mr. Cissé said. Several days later, he surfaced on a video pleading, grim-faced, for negotiations to speed his release; two masked gunmen were on either side of him and a black Islamist flag was in the background.

With obstacles to a quick military intervention in northern Mali piling up, the desert imprisonment of the 13 hostages is both an incentive and a hindrance for Western nations.

Mr. Fowler’s experience with his captors veered unnervingly between odd formality and earnest discussion to casual brutality: the “unstable” younger members of the group did not hesitate to “put sand in our food and walk over our faces” while he and his aide, Louis Guay, slept.

While defeating the extremists militarily might not seem difficult, Mr. Fowler said, he cautioned that “we should be modest and reasonable about our expectations. I cannot conceive of the elimination of A.Q.I.M.”

Kenya's last election ended in chaos and violence. Thousands were killed, and hundreds of thousands more were displaced. They were people like Grace Wambui, who now lives in a wasteland settlement without hope for a better future. Many fear the upcoming election could bring more violence.

The shabby tent far from home is all that Grace Wambui, 52, has left. It stands among two dozen other such shelters in the badlands near Lake Elementaita in Kenya. Locals use the term badlands to refer to the low-lying land on the shores of the lake that nobody wants. It is hard and dry and if rainfall is sparse, the dirt quickly sucks it up.

At the moment, however, it is the rainy season, and more water is pouring out of the clouds than the thin soil can handle. In the evenings, the water level in the camp begins to climb, forcing Wambui and her neighbors to flee, as they have so many times before. They go to the nearby village of Kikopey and ask the pastor there if they can spend the night in the church.

The tent community has chosen Wambui as its spokesperson, a kind of mayor for a settlement with no school, no police and no doctor. Those who are too sick to walk, she says, are carried to the nearby road on sacks where they are picked up for a trip to the next sizeable town, Gigil.

Wambui's small tent settlement provides shelter to some 50 people, a small share of the 250,000 Kenyans who are currently displaced in their own country. Some of them have fled from drought and hunger, but Wambui and thousands like her are political refugees. They are victims of the Kenyan tragedy that took place just under five years ago, a calamity that could repeat itself during elections next spring.

At the end of 2007, Wambui lived in a slum in the city of Eldoret in northwestern Kenya. It was presidential election season and Wambui, the mother of four children, was an active supporter of incumbent Mwai Kibaki. Once the votes had been counted, however, rumors quickly began to spread that Kibaki had won on the strength of widespread voting fraud and Wambui's neighbors accused her of wrongdoing. That isn't all they did, though.

Kenyans Killing Kenyans

Wambui is a member of the Kikuyu tribe, a minority in the multi-ethnic city of Eldoret. During the campaign, the political leaders of the Luo and Kalenjin tribes had assembled an alliance in opposition to President Kibaki and ensured their followers that their future would be bright if their candidate, Raila Odinga, were to win. Kibaki's followers did the same -- to the point that many began to view the election as crucial for the future of their tribe.

The deep ideological trenches that resulted provided the impetus for the post-election massacre that shocked the world in early 2008. Kenyans killed Kenyans with machetes and with bows and arrows, bands of youth swept through the slums lighting shacks on fire and murdering anyone they came across. The country suddenly found itself on the brink of civil war.

Only after former UN Secretary General Kofi Annan stepped in after a month of violence did opposition leader Odinga agree to become prime minister under President Kibaki. Some 1,200 had lost their lives by then and some 600,000 were homeless.

Wambui and her family knew they had to flee their home when they saw the first hacked up corpses on the side of the street. Young men were the primary victims of the orgy of violence, but women and children were far from immune. Some were attacked with rocks in the streets or had limbs chopped off with machetes. Others were beaten to death.

Still Displaced Years Later

Although the Kikuyus were a minority in Eldoret, they were numerically superior in Wambui's immediate neighborhood -- and they took advantage. "My people killed many Kalenjins there," she says bluntly. There were victims on all sides.

Yet the fact that refugees like Grace Wambui, more than four years later, still haven't found a new home, is one of the silent scandals in Kenya. Just as bad is the fact that many of the murderers in the massacre were never brought to justice.

Some of the tents in Wambui's small community in the badlands on Lake Elementaita were badly damaged by a mid-October hail storm. Chickens now cluck about under the torn open roofs, their former occupants have moved in with their neighbors.

As the rain pelts the tarp over her head, Wambui explains how her small community was established. She and others collected what little money they had and bought the small, hard piece of land they now live on, just as other groups of internally displaced have done across the country. But they face a significant hurdle: Officially, they don't exist. The government insists that all victims of the violence in 2007 and 2008 have been successfully resettled or have returned to their homes.

An Unholy Alliance

To this day, it remains unclear just who exactly was responsible for the expulsions and ethnic violence. However, both the Kenyans and Fatou Bensouda, the chief prosecutor at the International Criminal Court at The Hague, agree that some of the violence was well-organized.

The ICC has thus admitted a case against four Kenyan individuals for acting as indirect accomplices to murder, displacement and persecution. Complicating matters, however, is the fact that two of the defendants are candidates in upcoming presidential elections -- and are leading most opinion polls. They are Uhuru Kenyatta, one of the country's richest men and the finance minister until January, and William Ruto, who was likewise a member of the cabinet until he was thrown out on suspicion of corruption.

In early December, the two men announced that they would run as a team, so that Kenyatta could become president and Ruto his vice president. The charges at The Hague allege that both candidates hired criminal bands who went on murderous rampages through the streets. By the time the ICC opens proceedings against the duo in April, it is likely that they will be charging the Kenyan president and vice president.

The situation has many Kenyans worried that their country could be thrust into chaos once again when people go to the polls in 90 days. In addition, there have been reports of violent outbreaks across the country. In August, more than 100 people died during unrest in the Tana River District. Three bomb attacks in the capital of Nairobi killed at least 10 people within four weeks, and another attack on police by heavily armed cattle thieves in November left dozens of dead officers behind.

Low Voter Registration

All of these conflicts have at least one ethnic component to them. When nine people were recently killed in a bus attack attributed to the Somalian terrorist organization al-Shabab, bands of youths chased Somalians through the streets of Nairobi and plundered their businesses in revenge.

The country does have a number of anti-violence projects underway in poor areas, plus a new constitution and strict laws against ethnic incitement. But between the alliance of Kenyatta and Ruto and their biggest opponent, Prime Minister Raila Odinga, there seems to be a return to politics driven by ethnic concerns.

The ICC Chief Prosecutor Bensouda is aware that it could influence the upcoming elections, but she has not let that affect her work. Her job is to achieve justice for the victims of the expulsions and murders, she said in October in Nairobi. According to her special request on her first visit to Kenya, Bensouda went to a refugee camp, a tidy settlement with approved refugees. Her visit to the Gilgil settlement, however, was cancelled at the last minute due to what officials said were security concerns.

Kenyans can register for the March elections until mid-December. But out of some 22 million voters, so far just 6 million have done so. Will Grace Wambui take part? "No, I won't vote," the camp leader says. The woman who campaigned in 2007 is resigned.

She extends her arm in a gesture toward the scenic landscape of the Rift Valley. The sun blazes as wind rips through the plastic tarps in the ragged settlement. "I voted once," she says. "And one can see what that brought me."

Tunisians, already troubled by the rise of radical Islamists, are eyeing the political and economic paralysis gripping their country with a dismay shared across much of the region two years after the Arab Spring began.

In Sidi Bouzid — the central town where Mohamed Bouazizi set himself on fire on December 17, 2010, an act of desperation that sparked Tunisia’s uprising and touched off the Arab Spring — celebrations are planned to mark the anniversary.

But reflecting the country’s political divisions, part of the celebrations committee resigned in protest on Thursday, complaining of a “stranglehold” over the event by the ruling Islamist party Ennahda.

And an anti-government rally is expected on the day, by opposition activists angry at their leaders’ failure to kickstart a recovery and improve living conditions.

Residents of the restive town are almost unanimous that nothing has changed since the ouster of dictator Zine El Abidine Ben Ali in January 2011, with unemployment, a driving factor behind the uprising, continuing to plague the region.

Nasri’s wife, a university graduate, has been unable to find work since 2002.

Since coming to power in October 2011 after winning Tunisia’s first free elections, the government has struggled to revive the economy and is accused, in particular, of turning a blind eye towards crimes allegedly committed by the Salafist movement.

The Salafists, hardline Islamists, have been implicated in numerous acts of violence this year, including against Sufi shrines and art galleries and an attack in September on the US embassy in Tunis that left four people dead.

As recently as Thursday night, presumed Salafists attacked a hotel in the town of Sbeitla and tried to set it on fire after sacking the lobby and destroying bottles of alcohol in the hotel bar, police and witnesses said.

Tunisia’s Constituent Assembly has made little progress in drafting a new constitution and electoral law, with the process repeatedly hampered by differences between Islamists and secularists within the interim parliament.

Legislative and presidential elections have been postponed to June and could be pushed back further, contributing to the sense of uncertainty.

On Wednesday, Fitch Ratings cut Tunisia’s credit rating by one notch to BB+, putting its debt in the speculative or so-called junk category, saying the country’s “economic and political transition is proving longer and more difficult than anticipated.”

In Egypt, President Mohamed Morsi’s decree last month giving him near-absolute powers in a bid to push through a divisive new constitution has sparked weeks of rival protests by his Islamist followers and secular opponents.

Under mounting pressure, Morsi rescinded the decree at the weekend but is pushing through with a referendum this weekend on the constitution, which the opposition is urging its supporters to reject, claiming it undermines fundamental human rights and could lead to a strong Islamist influence on future legislation.

Fears of violence are running high after clashes in Cairo last week in which eight people were killed and more than 600 injured.

Earlier this week, the IMF put on hold a $4.8-billion loan Egypt has sought to fill budget gaps it will face in the 2013-2014 fiscal year, after the government asked for a delay in the negotiations because of the political situation.

In Libya, the authorities managed to organise general elections in July and have restored oil production levels, but security has proven the biggest challenge facing the government since the ouster of dictator Moamer Kadhafi last year.

Eight months of armed conflict left daunting challenges for the transitional authorities, who are struggling to build up state institutions and rein in the militias that were the backbone of the anti-Kadhafi war.

Libya’s economy has made a swift recovery.

But the country is awash with weapons and extremist groups remain a serious threat, as illustrated by the September 11 assault on the US consulate in Benghazi, in which US Ambassador Chris Stevens and three other Americans were killed.

INCIRLIK AIR BASE, Turkey — Defense Secretary Leon E. Panetta signed an official deployment order on Friday to send 400 American military personnel and two Patriot air defense batteries to Turkey as cross-border tensions with Syria intensify.

The American batteries will be part of a broader push to beef up Turkey’s defenses that will also include the deployment of four other Patriot batteries — two from Germany and two from the Netherlands.

All six units will be under NATO’s command and are scheduled to be operational by the end of January, according to officials in Washington.

George Little, the Pentagon spokesman, said Mr. Panetta signed the order as he flew from Afghanistan to this air base in southern Turkey, close to the border with Syria.

“The United States has been supporting Turkey in its efforts to defend itself,” Mr. Little said.

The order “will deploy some 400 U.S. personnel to Turkey to support two Patriot missile batteries,” Mr. Little added, and the personnel and Patriot batteries will arrive in Turkey “in coming weeks.” He did not disclose where the Patriots would be located.

After landing at Incirlik Friday, Mr. Panetta told a gathering of American Air Force personnel of his decision to deploy the Patriots.

He said the United States was working with Turkey, Jordan and Israel to monitor Syria’s stockpiles of chemical weapons, and warned of “serious consequences” if Syria used them, but he did not offer any specifics.

“We have drawn up plans for presenting to the president,” Mr. Panetta said. “We have to be ready.”

Turkey, which has been supporting the Syrian opposition to President Bashar al-Assad, has been worried it is vulnerable to Syrian missiles, including Scuds that might be tipped with chemical weapons. Those concerns were heightened by reports of increased activity at some of Syria’s chemical sites, though Mr. Panetta said this week that intelligence about chemical weapons activity in Syria had “leveled off.”

The recent Scud missile attacks mounted by forces loyal to Mr. Assad against rebels in northern Syria have only added to Turkey’s concerns. The Scud missiles fired at the rebels were armed with conventional warheads, but the attacks showed that the Assad government is prepared to use missiles as it struggles to slow rebel gains.

Syria denied Thursday that it had fired Scud missiles this week. But NATO’s secretary general, Anders Fogh Rasmussen, said that the intelligence gathered by the alliance indicated that they were Scud-type missiles. “In general, I think the regime in Damascus is approaching collapse,” he said. “I think now it’s only a question of time.”

NATO foreign ministers last week endorsed the decision to send Patriot batteries to Turkey. The details of how many each nation would send were not worked out until this week, officials said.

In preparation for the deployment, allied officials had conducted surveys of 10 potential sites, mostly in southeastern Turkey, that could be defended by one or more Patriot batteries.

But NATO nations do not have enough batteries to cover all of the sites. With tensions building with Iran and North Korea defying the United States and its Asian allies by launching a long-range rocket, American officials did not want to send more than a few Patriot batteries to Turkey, especially since it is not clear how long they will be needed.

But NATO diplomats said that the goal was to show enough of a commitment to Turkey’s defense to deter a Syrian attack.

It will take three weeks to ship and deploy the two American Patriot batteries, a Defense Department official said.

One allied official said it might be possible to speed up the deployment of the German and Dutch batteries if necessary. Each of those nations will also send up to 400 troops.

The United States, Germany and the Netherlands are the only NATO members that have the advanced PAC-3 Patriot system.

The Patriot batteries in Turkey will be linked to NATO’s air-defense system. The response by the missile batteries would be nearly automatic, firing interceptor missiles to destroy the target by ramming into it, a tactic the military calls “hit to kill.”

Moscow backtracked Friday on comments made by a top diplomat admitting that Syrian rebels might defeat its long-time ally Damascus even as Washington ordered 400 troops to near the border with Turkey.

A foreign ministry spokesman insisted that Moscow’s controversial support for President Bashar al-Assad’s regime was unchanged and that Thursday’s remarks by Deputy Foreign Minister Mikhail Bogdanov did not reflect official policy.

But Washington swiftly welcomed Bogdanov’s remarks and announced its troop deployment as US Defence Secretary Leon Panetta flew to an air base in southeastern Turkey not far from the frontier where the rebels have rear bases.

The US administration has been at pains to ensure that any foreign weapons deliveries to the rebels do not fall into the wrong hands, and it accompanied a long-awaited recognition of the armed opposition earlier this week with the blacklisting of the largest jihadist rebel faction.

Bogdanov’s comments, which were reported by several Russian news agencies, had appeared to mark a major change in policy by Moscow, which has repeatedly used its veto powers in the UN Security Council to shield its Cold War ally.

But foreign ministry spokesman Alexander Lukashevich insisted on Friday there was no such shift. “We have never changed our position and we never will,” he said.

The United States had welcomed the apparent change, saying it appeared Russia was “finally waking up to the reality.”

Lukashevich retorted that “we were never sleeping to begin with.”

Panetta accompanied his announcement of the deployment of US troops to Turkey with an order to send two Patriot anti-missile batteries to supplement those already offered by Germany and the Netherlands.

As rebel fighters have taken control of large swathes of northern Syria along NATO member Turkey’s southern flanks, there has been mounting stray fire across the frontier, some of it deadly, stoking fears of a major escalation.

Western governments resisted a Turkish call earlier this year for a Libyan-style no-fly zone to create a buffer zone at the border, but have expressed strong support for the key alliance member.

Turkey is a “very strong ally,” Panetta’s spokesman said as the Pentagon chief flew into the Incirlik air base.

“The secretary, as we are en route to Turkey, has signed an order that will deploy some 400 US personnel to Turkey to support two Patriot missile batteries,” he told accompanying reporters.

“We expect them to be deployed in the coming weeks.”

Germany and the Netherlands have also agreed to provide advanced “hit-to-kill” Patriot weapons, which are designed to knock out cruise and ballistic missiles as well as aircraft.

The move coincides with rising fears the Syrian regime may resort to using chemical weapons against rebel forces and after Assad’s army unleashed Scud missiles in recent days.

US and European leaders have warned the Assad regime not to use its arsenal of chemical arms, calling it a “red line” that would trigger international military action.

Turkey has vowed to defend its territory after cross-border fire wounded civilians and following the downing of one of its warplanes.

The Patriot, or “Phased Array Tracking Radar to Intercept on Target,” came into its own during the 1991 Gulf war when it was deployed to protect allies and US forces from Iraqi Scud missiles.

The Patriot’s boxy launch units became instantly recognisable in television footage of the conflict.

On the ground on Friday, regime forces bombarded southern districts of Damascus a day after two deadly car bombings near the capital, the Syrian Observatory for Human Rights said.

“Several blasts rang out in Damascus as southern areas of the city were bombarded,” said the Britain-based group which relies on a countrywide network of activists and doctors in compiling its reports and tolls.

On Thursday at least 135 people were killed across the country, the Observatory reported, bringing the overall to more than 43,000 toll since the start of the uprising in March last year.

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Syria Drops Incendiary Weapons on School, Rights Group Says

Dec 14, 2012NYT

Activists called the burning bombs dropped in the town of Quseir “strange shells,” but Human Rights Watch says they are Russian-made ZAB-2.5 incendiary submunitions containing highly flammable thermite.The group has accused Syria of using air-deployed incendiary weapons in four civilian areas, including Damascus, since mid-November. They cause extreme and sometimes disfiguring burns to human victims as well as extensive infrastructure damage.

What We Know

Human Rights Watch based its accusation on interviews with witnesses and analyses of videos posted online. It says these weapons have been used in Quseir, Maarat al-Numan and two Damascus neighborhoods. It says the attack shown in this video injured 19 civilians and severely burned eight homes.

What We Don't Know

We do not know the extent of the government's strike on Quseir and what other types of munitions may have been used. Human Rights Watch accuses the government of using incendiary weapons in the last several weeks, but we do not know if they may have been deployed before then.

CAIRO — A faded poster of Hosni Mubarak hangs on a wall in a crumbling neighborhood here, reminding residents of an empty pledge to find jobs for young people. Down the street, a campaign banner for his successor, Mohamed Morsi, hangs across the road, a reminder of more recent promises unkept.

In the neighborhood, called Boulaq, so long neglected that houses regularly collapse, there was little expectation that Mr. Mubarak would provide. But Mr. Morsi’s disregard has been much harder to take.

“We had high hopes in God, that things would improve,” Fathi Hussein said as he built a desk of dark wood for one of his clients, who are dwindling. “I elected a president to be good for the country. I did not elect him to impose his opinions on me.”

Away from the protests and violence that have marked the painful struggle over Egypt’s identity in the run-up to a referendum on Saturday on a constitution, residents of Boulaq have their own reasons to be consumed with the crisis. The chants of the protesters, for bread and freedom, resonate in Boulaq’s alleyways. In many of its industrial workshops, passed from struggling fathers to penniless sons, disappointment with the president, his Muslim Brotherhood supporters as well as the leaders of the opposition grows daily.

There is a sense in Boulaq that the raging arguments would be better resolved in places like this, where most Egyptians live, carrying the burdens of poverty with no help from an indifferent state, and where the revolution’s promise of dignity is long overdue.

When he took office five months ago, Mr. Morsi seemed to understand. “He talked about the conditions of the poor, the people in the slums,” said Amr Abdul Hafiz, a barber. “He talked about the street vendors and the tuk-tuk drivers. We thought he felt for us.”

The barber and many of his neighbors were convinced that Mr. Morsi and the Brotherhood had earned their chance to rule. People remembered the Brotherhood’s charity after the earthquake in 1992, and its decades of struggle as an outlaw movement. In stages, though, doubts grew as the Brotherhood broke its promises and Mr. Morsi seized power, culminating in his decision to ram through his constitution. Boulaq’s residents, including the president’s supporters, bristled at the thought of being treated as subjects again.

“He became occupied with other issues,” Mr. Abdul Hafiz said. “They want power, to make up for all the injustice they suffered, as if we were the ones who inflicted the injustice on them.”

At night, the arguments rage at a storied cafe on Abu Talib Street, with an intensity that no one here recalls seeing before. By day, the arguments simmer, in a neighborhood whose former grandeur still peeks out from underneath the rot.

Everywhere, people tell stories about the government’s failures, suggesting that the new leaders had turned out no better than the old ones.

In the shadow of a fallen dwelling, one of many that make Boulaq look as if it suffered a war, a widow stood over workmen she had hired to fix a ruptured sewer pipe. The ministry assigned to handle such matters had ignored her calls for three months, so she and her neighbors collected the money to pay for the repairs themselves.

On Abu Talib Street, Mr. Abdul Hafiz fretted over the dangers facing his pregnant wife, whose belly was swelling with excessive amniotic fluid. An appointment to see a doctor at a private hospital, which would cost $80, was too expensive. The administrators at a public hospital told her she could see a doctor a month after she was supposed to give birth.

Security guards threw Mr. Abdul Hafiz out of the hospital when he pointed out how ridiculous that was.

He wanted a change from Mr. Mubarak, who had coverings placed over the houses in Boulaq during the public opening of a nearby building “to hide insects like us.” It was part of a pattern of neglect that stretched back for decades, when the land under the residents was sold to investors in shady deals that no one has untangled.

Sheep grazed on celery outside the barbershop, on a dirt road that was paved when Mr. Abdul Hafiz was a child. He took over the shop from his father, only because he lacked the connections to get a government job. Under the mirrors in his shop, he kept a copy of the draft constitution that had caused so much debate, which he bought at a store for 50 cents. He had studied every word.

“I don’t see my rights reflected here,” he said, faulting the document for failing to deliver on the promises of the revolution, especially those related to social justice. Worse, the president and his allies had reached into people’s spiritual lives, lecturing a conservative nation on belief while fomenting discord between Muslims and Christians, he said.

“These are things for God,” Mr. Abdul Hafiz said.

Views here about opposition leaders are hardly better. Accused of hypocrisy and expedience in the current crisis, many are viewed as fighting for their own interests, rather than for those who live here.

Amira Hassan, 30, who sells fishing rods, has lived in Boulaq all of her life. Once a grand port on the Nile, the neighborhood has been shrinking steadily since the day she was born. “The houses that fall are never replaced,” she said.

She has been following the debate over the constitution on television. “There’s a lot I don’t like,” she said, mixing criticism of the charter — over provisions that deal with Islamic law, for example — with complaints about Mr. Morsi. Like many of her Muslim neighbors, she is angry that Christians are fearful. And she is suspicious of the president’s attempts to seize more power.

She planned to vote no. “I might as well do it,” she said. “The people here don’t care.”

In interviews throughout Boulaq, people fretted that their neighbors were ignoring the constitution, because they were consumed with their daily lives, or were too uneducated to care. The opposite was true: it was difficult to find a person who had not read the document or not considered how to vote.

For some, it was not the charter itself, or even the president’s power grab, that was the problem, but that Egypt was becoming an unfamiliar, intolerant place. Some people said they expected that the anger would be reflected in elections for a new Parliament. Islamists won 70 percent of the seats in the last round.

Others, like Emad Qutb, another workshop owner who had posters of Mr. Morsi on his door, said the news media were playing up the divisions in the country. “The people who are worried don’t understand the constitution,” he said. “The so-called leaders chose to read some parts and disregard the rest.”

Clauses of the charter could still be negotiated, said Mr. Qutb, who called himself an Islamist. “The problem is, Egyptians are emotional,” he said. “People do not understand what the president is trying to do.”

Across the street, Mr. Hussein, the woodworker, measured Mr. Morsi’s record against his own low expectations. “I just wanted progress and reform,” he said. “I wanted Muslims to be good to each other.”

“Now no one can agree,” he said. “There is no stability.”

Mai Ayyad contributed reporting.

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December 13, 2012

Prosecutor Says Morsi Aides Interfered in Inquiry

By DAVID D. KIRKPATRICKIHT

CAIRO — A prosecutor in Cairo is accusing aides to President Mohamed Morsi of applying political pressure to an investigation into the bloody clashes here last week, in order to corroborate Islamists’ claims about a conspiracy against the president involving paid thugs to foment violence.

The complaints by the prosecutor, Mustafa Khater, have raised some of the most serious questions to date about the Morsi government’s commitment to the impartial rule of law, as well as about its ties to the Muslim Brotherhood, the Islamist group whose political arm the president once led.

Since the clashes outside the presidential palace last week, accounts have appeared of Mr. Morsi’s Islamist supporters detaining and abusing dozens of opponents, whom they accused of being paid to attack them and kept tied up overnight by the gates of the palace. A spokesman for Mr. Morsi said the president was not responsible for those events and had ordered an investigation.

If Mr. Khater’s accusations, detailed in a memorandum to senior judicial authorities that circulated widely on Thursday, are borne out, they would suggest that the president’s chief of staff was directly involved in what happened to the captives.

The events resonate against the backdrop of the political battle raging over a draft constitution and the referendum on it that is scheduled for Saturday.

Mr. Morsi’s allies argue that the new charter will usher in a government of institutions and laws, but critics say it will provide too little protection for individual freedom. They see ominous hints of authoritarianism in Mr. Morsi’s attempt three weeks ago to claim unchecked powers until the referendum. He said he was putting himself above the law for a short time to keep his political opponents from using the courts to block the referendum.

Mr. Morsi’s first use of those broadened powers was to replace the country’s chief prosecutor, arguing that he had protected corrupt former officials and cronies from the overthrown government of Hosni Mubarak.

The local Cairo prosecutor’s accusations on Thursday suggest that Mr. Morsi may have merely replaced one politicized national chief prosecutor with another.

A spokesman for Mr. Morsi denied on Thursday that the president had meddled in the investigation of the events outside the palace.

“The presidency does not interfere or comment on the judiciary,” the spokesman, Khaled al-Qazzaz, said in an e-mail.

Defense lawyers confirmed elements of Mr. Khater’s account. During last Wednesday’s fighting, thousands of Islamist supporters of the president battled similar numbers of his opponents for hours with thrown rocks and occasional gunshots, and Islamists captured and detained dozens of their opponents. It is unclear how many of the captors belonged to the Muslim Brotherhood or more hard-line groups. But videos, corroborated by the accounts of victims, indicated that the vigilante jailers tried to bully their prisoners into confessing that they were paid to use violence as part of a conspiracy against the president.

Mr. Khater wrote that around dawn the next day, he received a phone call from Mr. Morsi’s newly appointed public prosecutor, Talaat Ibrahim Abdullah, who said that “49 thugs” had been arrested and detained outside a gate to the palace. Mr. Khater said that when he arrived at the scene, the president’s chief of staff, Refaa al-Tahtawi, displayed guns, knives and other implements along with a document stating that the Islamists had confiscated the weapons from the captives.

All 49 captives had been beaten, Mr. Khater wrote, and they said members of the Muslim Brotherhood had tried to coerce them into confessing that they had taken money to commit violence. But prosecutors found no evidence that they had done so.

Even so, Mr. Morsi declared in a televised speech later that night that prosecutors had obtained confessions.

Still, officials from the chief prosecutor’s office requested a “firm” response in the case, Mr. Khater wrote, and the officials later pressed Mr. Khater to at least order the detention of a group of poor and unemployed prisoners.

When Mr. Khater nonetheless released them all, Mr. Abdullah “reprimanded him,” according to the memorandum, and the following day ordered him transferred to the obscure town of Beni Suef in Upper Egypt.

“The transfer was in fact a punishment for a violation that I haven’t committed, and constitutes an explicit threat to the entire team working on the case,” Mr. Khater wrote.

On Thursday, the transfer was canceled and Mr. Khater was restored to his position in Cairo without explanation.

Mr. Khater, Mr. Tahtawi and Mr. Abdullah could not be reached for comment.

GAZA CITY — Hamas has been riding high of late, after its professed victory in the recent conflict with Israel and the overthrow last year of Egypt’s president, Hosni Mubarak, an avowed enemy.

Nevertheless, it is facing serious financial troubles stemming from the revolt in Syria and its expanding military ambitions, and its increasing demands on the impoverished population of Gaza are stirring resentments. In response, and with an anxious eye to the Arab Spring revolts, some Gaza residents say, it has eased up slightly in its religious restrictions on people’s lives.

The government of President Bashar al-Assad in Syria had been a stalwart ally and a conduit for Iranian money, weapons and military expertise. But the Assads are members of the Alawite sect, an offshoot of Shiism, and are fighting mostly Sunni rebels, forcing Hamas, which is Sunni, to choose sides. It decided to shut its political bureau in Damascus in March and send its political chairman, Khaled Meshal, shuttling between Qatar and Egypt.

The break with Syria has also meant a sharp cut in the financing Hamas received from Iran, which is also facing economic problems because of Western sanctions against its nuclear-enrichment program, sanctions that have cut the value of the Iranian rial in half in a year.

In response to this gathering financial crisis, Hamas has sought new support from Sunni governments like Qatar and the United Arab Emirates. But it has also raised taxes and fees considerably, prompting complaints from Gazans.

Mr. Meshal’s first, triumphal visit here last weekend displayed Hamas’s power and organization. In the five years since it drove its Palestinian rival, Fatah, out of Gaza in a brief civil war, after winning elections in 2006, Hamas has established a repressive ministate with a strong Islamist cast that it clearly has no intention of abandoning. Hamas now requires “entry visas” from visitors, for a fee, and searches luggage to ensure that no one imports any alcohol. Even more striking, Hamas has set up its own lavish civil administration in Gaza that issues papers, licenses, insurance and numerous other permissions — and always for a tax or a fee.

Gazans recognize that there is more order here, more construction and less garbage. But many resent the economic burden of financing Hamas and, implicitly, its military.

Ziad Ashour, 43, a butcher, said that “since the first intifada,” meaning the Palestinian uprising in 1987, “things have steadily declined in Gaza.” But in the last year, he said, they have gotten considerably worse economically.

Another merchant in the Beach Camp market said that Hamas, which tightly controls tunnel traffic on the Egyptian border, had raised taxes on basic items, including canned goods and building materials. There is a tax of about 70 cents on every pack of cigarettes, and around $2.50 on every gallon of gasoline or diesel, fixed even if the final price is roughly half that of Israeli gasoline. People pay to apply for identification cards, drivers’ licenses, building permits — “there are fees for everything,” the merchant said.

Larger businesses are especially targeted for high taxes. “Now businessmen know the difference between Fatah and Hamas,” another merchant said.

Adham Badawi, 22, bought an Egyptian-assembled, three-wheel Chinese motorcycle cart for his family textile shop for $1,500, “imported” through the tunnels. He had to pay $395 in tax, plus registration, insurance and a driver’s license. He says the contraption is better than a donkey because it eats only when in use and does not need to be looked after. But the fees are expensive, he said, and he is nervous about renewing his license, registration and insurance.

Hamas needs money not only for salaries, government and its charitable activities, but also for the Qassam Brigades, which some experts estimate at 20,000 men — most of whom were on show for Mr. Meshal’s visit, in uniforms with good boots and black balaclavas covering their faces, and armed with automatic rifles and other equipment, some of it smuggled from Libya.

The budget for the Qassam Brigades is not revealed, and its main task is to protect Hamas. But it has also been at the forefront of military relations with Iran and Syria, in rocket importation and development and even drone development with Iranian aid, Israeli officials say. The longer-range rocket and drone development was a particularly important target for Israel in the eight-day conflict last month, they say.

But the brigade has also been active in the building of secret underground fortifications, which require many men and large amounts of building supplies, like steel and cement. In a speech on Saturday, Prime Minister Ismail Haniya praised the brigade for its “underground work,” saying for the first time that 40 to 50 men had died laboring underground, which he said previously had been described simply as killed in “jihadi missions.” During the fighting with Israel, there were few Hamas fighters or leaders to be seen: they were all somewhere underground or in hiding in what Israel considers to be an intricate system of tunnels and bunkers modeled on those built with Iranian guidance by Hezbollah in southern Lebanon.

Hamas nonetheless sees itself as close to the people and sensitive to public attitudes. The revolts of the Arab Spring were a kind of warning, said one analyst close to Hamas who agreed to speak on the condition that his name not be used. The Islamization of Gaza is “a process,” the analyst said, “and it can move step by step in tune with events.”

In response, Hamas has eased up on its interference in personal life in the name of religious purity. It is still building massive and lavish mosques everywhere (with fortified basements for Hamas members to hide during airstrikes, residents say), but the Hamas police have mostly stopped harassing women for not wearing head scarves, stopped insisting that all high-school girls wear head scarves (though a vast majority do) and stopped preventing women from smoking water pipes in public, and they are more tolerant on the beaches. Fewer young men are arrested for contact with young women not their fiancées. Hamas members have stopped setting fire to Internet cafes in the name of pornography prevention.

But the press is still heavily monitored and controlled, Fatah members are watched, and the sheer visibility of armed Hamas police and militia forces is intimidating. After having confronted and disarmed significant Fatah-supporting hamullas, or clans, Hamas has a near monopoly on arms inside Gaza.

For now, Hamas has the upper hand in dealings with Fatah, and no immediate worries about losing the allegiance of Palestinians in Gaza. But popularity can be fleeting in a period of economic despair, when nongovernment jobs are scarce and even construction workers, who 20 years ago earned $65 to $80 a day in Israel, now earn around $13 a day.

Yusra Jabar, 50, is a childless widow who helps her sister feed her four children with aid from the United Nations. She was buying radishes recently to pickle because they are cheap — about 18 pounds for $2.65. They rarely eat meat. “It is a life of depression and deprivation,” she said.

In a common plaint, she said: “We wish to live like other people in the world outside. We want to have the taste of life.”

Ms. Jabar is nonetheless proud of Hamas and its ability to hit Israel, and her opinion for now is widespread. “Hamas feels definitely in the lead over Fatah,” said Mkhaimar Abusada, a political scientist at Al Azhar University in Gaza City. “Meshal now says that he’s not afraid of new Palestinian elections because Hamas is now much more popular because of the war. But how long will it last?”

He remembered a similar burst of Hamas popularity in October 2011, after the release of the Israeli soldier Gilad Shalit, whom Hamas held for five years and exchanged for more than 1,000 Palestinian prisoners. “But a month later the Palestinians woke up to the same problems: poverty, mismanagement, siege, unemployment, little freedom of movement,” Mr. Abusada said. “If it can’t deal with these same issues, Hamas will find itself in the same position as it was before the war.”

************

December 13, 2012

In Step Toward Palestinian Unity, Hamas Holds Rally in West Bank

By JODI RUDORENIHT

NABLUS, West Bank — Hundreds of men and boys sporting the signature green of the militant Hamas faction marched through the narrow alleys of the old city here on Thursday afternoon, calling for Palestinian unity but also renewed attacks on Israeli cities, in the first public demonstration by the Islamist party allowed in the West Bank in years.

“Qassam, repeat it, Tel Aviv, destroy it,” they chanted, invoking the name of the armed wing of Hamas, as they wound through the ancient marketplace, wearing and waving green flags and carrying children on their shoulders. “Qassam, repeat it, hit Haifa this time.”

The rally, to mark the 25th anniversary of the founding of Hamas, was billed as a step toward reconciliation with the rival Fatah faction that rules the West Bank. The two have been fiercely divided since 2007, after Hamas’s violent ouster of the Palestinian Authority from Gaza, and ever since Hamas activities have been all but banned in the West bank and the party’s leaders routinely harassed or imprisoned. Thursday’s crowd was mainly students and other young men, many of whom had never before attended a Hamas rally; those from the elder generation were ebullient at being able to show their colors again.

“I’m happy to see Hamas flags being raised,” said Radwan Abu Muhamed, 58, who said he had been a member of Hamas since its founding in 1987 and of its precursor, the Muslim Brotherhood, since 1981. “But I want to see other flags being raised also because I believe Palestine is bigger than Fatah and Hamas.”

“God willing, it will be a beginning of a new era,” Mr. Muhamed added. “An era of openness, an era of accepting the other opinion, an era of partnership.”

Such calls for unity have been growing among common citizens and leaders alike since last month’s bloody eight-day conflict between Israel and the Hamas-controlled Gaza Strip, and United Nations General Assembly vote upgrading the Palestinians’ status to a non-member observer state. Hamas plans more demonstrations throughout the West Bank after noon prayers on Friday, and has given Fatah permission to mark its own anniversary next month in Gaza.

However, the rallies in one another’s territories constitute at most a first step toward reconciliation. Leaders of the two factions have signed no fewer than four unity pacts in recent years but failed to fulfill them. Repeated promises for renewed talks in recent days have also yet to come to fruition, and the ideological differences remain profound.

Khaled Meshal, the political leader of Hamas, said in a defiant speech on Saturday that he would never recognize Israel, calling for a Palestinian state stretching from the Mediterranean Sea to the Jordan River, and saying the path to liberation was through resistance, not negotiation. President Mahmoud Abbas of the Palestinian Authority, the leader of Fatah and the Palestine Liberation Organization, has rejected violence and seeks to negotiate with Israel to establish a Palestinian state in Gaza and the West Bank, using the 1967 borders as a guideline.

On Thursday, Mr. Abbas sought to downplay the differences, telling reporters in Turkey that he did not agree with Mr. Meshal’s refusal to recognize Israel, and pointing to a 1993 agreement signed by Fatah and Hamas that “stipulates a two-state vision.” The Turkish media reported that Mr. Abbas and Mr. Meshal had a half-hour phone conversation on Wednesday — they have been speaking frequently since the onset of the Gaza conflict — and that Mr. Abbas said reconciliation talks would resume in Cairo in two weeks.

“Reconciliation, by definition, is a very, very long-term process — it involves a lot of grievances and, unfortunately, blood,” said Husam Zomlot, a Fatah official. “It’s not going to be a single bullet. There will have to be a gradual process of deescalating, normalizing political processes. It doesn’t mean years; it could happen within weeks.”

Mr. Zomlot and other West Bank political leaders said Thursday’s rally was an important step in building unity on the ground. It was not a large demonstration — perhaps 1,000 Hamas supporters gathered after the march in Nablus’s bustling main square, with a similar number of onlookers smiling from the periphery, many leaning out from five levels of the municipal mall’s parking garage. It was peaceful and orderly under crisp sunshine, with no visible presence of Palestinian security officials other than those directing traffic on nearby streets. But elsewhere in the West Bank on Thursday, 90 Palestinians were injured, one critically, and at least six arrested, in a series of clashes with Israeli soldiers in the volatile city of Hebron, where a border policewoman fatally shot a teenager the day before after he brandished a weapon that turned out to be a toy.

Here in Nablus, there were a few Palestinian flags among a sea of Hamas ones. Men tied green bands of cloth around their heads or draped them from their necks, some making flags into capes. In the back, some women in white headscarves held cardboard models of the Iranian-made, long-range Fajr 5 rockets and of the M-75’s Hamas claims to have manufactured, both of which are credited with reaching Tel Aviv and Jerusalem during last month’s fighting.

“March, Hamas, march,” the crowd chanted. “You are the cannon, we are the bullets.”

Adeeb Bani Fadel, a 43-year-old English teacher, said the rally was “a message for the international community,” much of which views Hamas as a terrorist organization, that “Hamas is the majority for the Palestinian people here” and “to sit with Hamas and to listen to Hamas.”

Shaul Mishal, a professor of political science at Tel Aviv University who has written two books about Hamas, called Nablus, a city of 130,000, a prime example of where Islamism and Palestinian nationalism are coming together for a younger generation. Hamas won 13 of 15 City Council seats here in 2005, though many of those members later resigned or went to prison. For many, the lasting image of Hamas in Nablus before Thursday was of a 2007 raid on its offices by Fatah’s Al Aksa Brigades.

Rajat Naseef, a spokesman for Hamas in the West Bank, said the party chose Nablus because it is “the heart of the West Bank” and said the rally was “planting a branch of unity.” Among the speakers was Amin Makboul, a Fatah leader, who cited the dual Palestinian “victories” in Gaza and the United Nations, addressed the Hamas crowd as “my brothers,” and said, “Our people are demanding that we achieve unity and end the split.”

The crowd chanted: “Hamas today in Nablus, tomorrow, Fatah in Gaza. Let’s end the chapter of the split.”

Ghassan Shakaa, a former Fatah member who is a member of the P.L.O. executive committee and who was recently elected mayor of Nablus as an independent, attended even though he rejects Hamas’s tactics of violence and sending “missiles to Israel to hurt civilians.”

“They are part of the Palestinian people, it’s their time to celebrate, and I think everyone should join them — why not?” Mr. Shakaa said in an interview beforehand. “My presence is saying yes, I am with you on your day.”

In a rare show of muscle, Greek authorities on Thursday arrested Lavrentis Lavrentiadis, a high-profile oligarch, at his home in an affluent Athens suburb in a criminal case that has underscored growing concerns in Greece over graft and crony capitalism.

Prosecutors charged Mr. Lavrentiadis, 40, with embezzling from a bank he helped oversee, Proton Bank, to prop up his struggling businesses. He is also accused of fraud, money laundering and membership in a criminal gang, charges that could carry a life term, a court official said.

Mr. Lavrentiadis, who built a multibillion-dollar empire only to see it stumble in the Greek crisis, is expected to face an investigating magistrate on Friday. A spokesman said he was not immediately available for comment.

The arrest coincided with the approval of the release of a $45 billion portion of aid from Greece’s European creditors, who have vigorously pressed Athens to clean up the corruption that has been a root of the country’s problems.

On Wednesday, an Athens court ordered the seizure of assets belonging to Mr. Lavrentiadis and 29 of his former associates. The ruling upheld an appeal by the shareholders of Proton Bank, once majority-owned by Mr. Lavrentiadis, who claimed to have suffered major losses after the lender allegedly issued hundreds of millions of dollars in bad loans to dormant companies.

Few figures of Mr. Lavrentiadis’s stature have been prosecuted recently in Greece. Greek news outlets on Thursday evening debated the significance of the timing of the arrest, and whether efforts were being made to make an example of Mr. Lavrentiadis.

As a relative upstart, Mr. Lavrentiadis had been working hard to gain acceptance among the small circle of Greece’s ruling families, contributing heavily to charities and buying media outlets. But in an interview recently, he raised the possibility that he was being sacrificed because he was still an outsider.

A court official said the timing was coincidental. “The investigation reached fruition and it was time for his arrest,” the official said.

The Bank of Greece and Greece’s financial prosecutor had spent over a year investigating Mr. Lavrentiadis and his associates. But a few months ago, his name resurfaced as one of more than 2,000 Greeks appearing on the so-called Lagarde list of people said to have accounts in a Geneva branch of the bank HSBC. The accounts are now the subject of an investigation into tax evasion, a charge Mr. Lavrentiadis denies.

Prime Minister Antonis Samaras has sought to make examples of some cases of suspected wrongdoing by high-profile figures. In September the government began investigating the bank accounts of more than 30 Greek politicians to determine whether they should be charged with tax evasion.

But George Katrougalos, a Greek constitutional lawyer who is a fellow at New York University, said the arrest was unlikely to represent the beginning of a sustained campaign against suspected wrongdoers.

“Quite the opposite,” he said. “He’s being made a scapegoat for the system to continue to be like it used to be, which is closed networks between government and the economic elite, which are not transparent, and no one knows what’s happening.”

Mr. Lavrentiadis has denied wrongdoing and dismissed the investigation by the Bank of Greece as not objective. In the recent interview, he said that he was “clean” and that he was being unfairly targeted.

After 14 hours of talks, EU finance ministers agreed a system of bank supervision. The project covers only a small number of firms, but it marks a step towards an end to the crisis, says the European press.

"Europe will finally regulate its banks," French daily Le Monde says following an agreement signed by EU finance ministers in the early hours of December 13. "A unanimous and historic agreement on bank supervision starting in 2014." The document allows for direct regulation by the European Central Bank "of establishments that have assets of over €30bn or which represent over 20 per cent of the GDP of the country in which they originated or which benefit from European aid," Le Monde explains. The measures apply to 150 to 200 banks, out of 6,000, in the EU.

In its leader article, Le Monde hails, "The banking union's great leap forward, which is aimed at preventing not war, but the death of the euro." The paper also explains how the banking union was forged:

When the Spanish banks were threatened with going under, in the spring of 2012, the idea of a banking union emerged. To save themselves, those Europeans spared by the crisis would have to directly bailout those firms in bankruptcy. The Germans rightly demanded that credit institutions first be regulated by the ECB. This first stage has just been accomplished. Regulation is but a first requirement and must be accompanied by a European mechanism for crisis management and bailouts. A European deposit insurance scheme would be the banking union's crowning achievement. This is desirable but was rejected by Berlin. It is still far away, as far away as a federal Union.

The BBC's Europe Editor, Gavin Hewitt, says the deal is a “further example of how the Euro zone crisis is carving out a new Europe, less from choice but more by the need to survive. The direction of travel is causing unease – and not just in Britain.”

In Germany, financial daily Handelsblatt sees the agreement as "very good news", especially for citizens in the eurozone –

Logo – Handelsblatt, Düsseldorf

It is high time to remove national regulatory authorities. They were often under the influence of politicians who insisted on keeping a protective hand on their banks and thus prevented much-needed corrective measures. Spain is one example. So is Cyprus. German taxpayers can also rejoice. The failure of German bank regulators cost them more than the Greek bailout. Hopefully the European Central Bank will do better. It would be difficult to do worse.

Little is left of the ambition of leading Europe towards a true banking union, mourns Portugese financial daily Diário Económico. For the paper –

Over the year, the leaders of the EU depicted the idea of a banking union as a systemic response to the euro crisis. It was to be the kernel of a new political and economic union in Europe. A few months later, the problem still exists. But, the sense of urgency has disappeared, the enthusiasm also. The application, in dribs and drabs of what seemed a good idea on paper, will not resolve the crisis. But it will weaken banking regulation, at least in the short term.

Spanish daily El País says the banking union accord is "full of technicalities but in effect it is always the same old story: who holds the power?" And the answer is clear: Germany. After having succeeded in removing local banks from the jurisdiction of the single regulator,Logo – El País, Madrid

Germany also imposed a watered-down solution for the common deposit insurance fund (which consists of just standardising national funds) and a considerable delay for the resolution fund (a mechanism to close banks if necessary), at one time a back-door way of sharing the euro's problems. And the schedule of many other issues was delayed despite the advice of Italy, of France and especially of Spain, the most financially exposed country.

As recently as November, Chancellor Angela Merkel said that this month's EU summit would set an ambitious timeline for far-reaching reforms in the euro zone. European leaders in Brussels responded to relative calm on the markets by backing away from such aspirations and taking a breather.

The list of accomplishments this latest European Union summit was supposed to deliver was long: The euro zone was to receive a substantial push forward with a decisive redesign of the currency union's architecture. There was even to be a new convention to rapidly adjust EU treaties to the realities of the changes occurring in the euro zone.

As recently as November, Chancellor Angela Merkel announced in a speech before the European Parliament that the December summit would establish an "ambitious timeline" for the next two to three years.

Yet by the time the 27 heads of state and government arrived in Brussels on Thursday evening, such ambition had been forgotten. It could be pre-Christmas exhaustion that got the better of the EU leaders, but enthusiasm for reform was nowhere to be found. One after another, they insisted that they would merely hold nonbinding talks about the deepening of the currency union. "A relaxed round on the future of the EU," is how Finnish Prime Minister Jyrki Katainen called it.

After nine hours of talks, the summit agreed on a five-page paper that, while called a "roadmap," is little more than a vague outline for the next six months. Indeed, the most concrete date mentioned is June 2013 -- by then, European Council President Herman Van Rompuy is to have worked out a solid timeline for the establishment of closer fiscal policy coordination among euro-zone member states. He is also to examine how bilateral reform treaties between the European Commission and individual common currency members could look in order to make reforms recommended by Brussels more binding. The creation of a fund -- referred to vaguely as "solidarity mechanisms" at the insistence of Germany -- that could be used to reward those countries serious about reform is also to be examined.

At the behest of European Central Bank (ECB) head Mario Draghi, the EU leaders spoke in detail about methods for winding down struggling banks. Such a mechanism is a crucial element of the bank supervisory regime euro-zone finance ministers agreed to early on Thursday morning ahead of the summit, Draghi insisted.

Vague Agenda

The summit's closing statement reflects that importance. The document will request that the European Commission prepare a law to govern the process for winding down stricken banks -- with the goal of passing it through European Parliament before the current legislative term ends in 2014. Merkel is insisting that the process be designed in such a way that European taxpayers are not stuck with any bill for closing down bad banks. Instead, it is to be financed via contributions from the financial sector.

When it comes to the recapitalization of banks, however, taxpayer money will play a role in the future. As soon as the new banking oversight authority is established within the ECB, wobbly banks will be able to apply for assistance directly from the European Stability Mechanism (ESM), the euro-zone bailout fund. Until now, only national governments could apply for ESM aid. Still, it will likely take until 2014 before the procedure has been put in place. Euro-zone member states are to begin examining operational details in the coming months.

Such is the vague agenda between now and next summer. All other questions relating to currency union reform, such as that of a separate euro-zone budget as well as various models for joint debt liability, were deferred. The detailed, long-term reform plans worked out by European Commission President José Manuel Barroso and European Council President Herman Van Rompuy in recent weeks went unmentioned.

Indeed, it seemed that European leaders were eager to slow down after the frenetic pace of reform set in recent months. It had been an extremely busy year, Merkel said almost apologetically.

And she is not wrong. In the future, 2012 might well be seen as the year in which the euro zone finally managed to see the light at the end of the euro-crisis tunnel. The permanent bailout fund ESM became operational, the ECB jumped in as a powerful defender of the common currency by pledging unlimited purchases of sovereign bonds from struggling euro-zone member states and the bloc also agreed to a bank supervisory regime. The EU even won the Nobel Peace Prize.

'The Next Stop'

Even financial market investors, long the canaries in the euro-crisis coal mine, seem impressed. Interest rates on sovereign bonds issued by many crisis-stricken countries in the currency union have fallen to a manageable level and the situations in Spain and Italy appear to be largely under control for the time being.

Still, dangers continue to lurk. The euro crisis isn't over yet, as Merkel herself said earlier this week -- and it could return at any moment. Nevertheless, European leaders seem to no longer feel an imperative for immediate action. And Merkel, for her part, is facing an election year in 2013, making her even less willing than normal to take bold new steps toward European reform.

All of which means that Barroso's long-term plan for a deepening of the currency union has been put on ice and will remain there for some time. A separate budget for the euro zone, centrally coordinated tax policies and unified labor market rules -- all of that has been left for later. Even a convention on possible changes to EU treaties likely won't take place until after the European parliamentary elections in 2014.

Merkel said that European leaders had made it clear to Barroso and Van Rompuy that more deference must be paid to the individual member states. She was less than pleased that Germany's proposal for offering temporary assistance to reforming euro-zone states was transformed in the Barroso/Van Rompuy paper into a plan for a euro-zone budget to soften the effects of economic shock. She was careful to point out that the solidarity fund currently under discussion will be worth just €10 to €20 billion -- and not more.

In other words, European leaders prefer to continue taking the euro crisis one step at a time. "This is not a roadmap that outlines the entire route," said one German government source. "It merely identifies the next stop."